Economy Core

Economy Core.................................................................................................................................. 1
Growth Good................................................................................................................................... 3
Growth Sustainable......................................................................................................................4
Generic Sustainability..............................................................................................................5
Growth Solves Environment....................................................................................................7
Growth Inevitable.....................................................................................................................9
Growth Good Impacts................................................................................................................10
Collapse Causes Conflict.........................................................................................................11
Interdependence Prevents War..............................................................................................13
Key Sectors................................................................................................................................. 15
Aerospace................................................................................................................................ 16
Agriculture.............................................................................................................................. 17
Biotech.................................................................................................................................... 19
Business Confidence...............................................................................................................21
Competitiveness.....................................................................................................................22
Consumer Spending...............................................................................................................23
Hegemony.............................................................................................................................. 25
Manufacturing........................................................................................................................26
Oil Sector................................................................................................................................28
AT: De-development..................................................................................................................30
De-growth Theory Wrong.......................................................................................................31
AT: Environment Impact.......................................................................................................34
Transition Fails.......................................................................................................................37
Growth Bad.................................................................................................................................... 38
Growth Unsustainable...............................................................................................................39
Generic Unsustainable...........................................................................................................40
Spillover.................................................................................................................................. 41
Science/Models......................................................................................................................42
AT: Technology.......................................................................................................................45
AT: Environment....................................................................................................................... 46
Kills environmentExtinction...............................................................................................47
Net-Negative Effect................................................................................................................48
Emissions/Fossil Fuels..........................................................................................................49

Warming................................................................................................................................. 51
AT: Growth Good Impacts.........................................................................................................52
Dedevelopment/Transition....................................................................................................53
Econ Resilient......................................................................................................................... 54
Growth Causes War................................................................................................................56
AT: Collapse Causes Conflict..................................................................................................58
AT: Interdependence Checks.................................................................................................60
AT: Diversionary Theory........................................................................................................62
AT: Key Sectors.......................................................................................................................... 63
AT: Agriculture.......................................................................................................................64
AT: Aerospace........................................................................................................................ 66
AT: Biotech.............................................................................................................................68
AT: Consumer Spending........................................................................................................70
AT: Competitiveness...............................................................................................................73
AT: Business Confidence........................................................................................................79
AT: Hegemony.......................................................................................................................80
AT: Manufacturing.................................................................................................................85
AT: Oil.................................................................................................................................... 88

Growth Good

Growth Sustainable

Generic Sustainability
Growth sustainable key to maintaining wealth intact

Farzin 04 (Y. Hossein, economics at UC Davis, Is an Exhaustible Resource Economy

Sustainable?, Wiley, 7-11-13)
I have argued that whether an economy is sustainable or not depends crucially on the specic concept of sustainability adopted. To
sharpen this argument, I have focused on a purely exhaustible resource economy and examined the possibility of its

sustain- ability according to two alternative concepts: (a) permanently maintaining a constant- consumption (utility) path, and
(b) keeping the value of national wealth intact. I have shown that sustainability in the latter sense requires that the
value of resources extracted and consumed should always be equal to the imputed interest income from the resource asset, or,
equivalently, the extraction rate should decline over time at a rate equal to the market rate of interest. What seems
appealing about these equiva- lent conditions are that:(i) they are empirically easily testable,and (ii) the former may be interpreted
as dual to the SolowHartwick rule of reinvesting resource rents to sustain a constant consumption level,
and the latter as dual to the Hotelling r-percent price rule. Further, I have explicitly shown the

relationship between the

two sustainability cri- teria, and particularly that the sustainability of consumption ow requires that the
resource asset value always appreciates at the market interest rate. Accordingly, while sustainability in
the sense of constant consumption ow is not possible for an exhaustible resource economy , sustainability in the
sense of keeping the value of national wealth intact is, provided preferences are presented by a logarithmic utility function. More
generally, the relationship between the two sustainability criteria turns out to depend crucially on the magnitude

of the social discount rate and the degree of social aversion to intergenerational inequality .
Interestingly, for plausibly small values of the former and reasonably large values of the latter, the implied optimal path can be quite
close to paths implied by alternative concepts of sustainability. Much in the spirit of Heals (2001) conclusion, this nding may
lessen to some degree concerns about alternative concepts of sustainability and about sustainability versus optimality. However, and
perhaps ironically, such an outcome is more likely for the rich resource- based economies than for the

very poor ones. It is important to be cautious in interpreting the conclusions reached here based on a simplied model of a
purely exhaustible resource economy. For one thing, aug- menting such an economy with services of renewable
natural resources (e.g., sheries, forests, land and water sources, and renewable energy resources) and human-made capitals
(e.g., manufactured capital, human capital, and social capital), provided their utilization rates remain within
their respective regenerative capacities or reproduction limits, not only can ease the constraint of resource
exhaustibility on sustaining reasonably high living standards, it can also narrow down the gap between the utili- tarian optimal and
sustainable development paths. On the other hand, steady and high population growth rates, as have been

experienced by many poor developing coun- tries, can act in the opposite direction, unless
technological advances continue at suf- ciently high rates to increase the productivities of
natural and human-made capitals and enhance the possibilities of substituting the latter types of
capitals for the former ones. What seems fundamental in this process of technological advancement to offset the effect of
population growth, and poses a principal challenge for development policy,is the role of investment to transform a given
population from its primitive form of raw labor with low productivity to its higher form of human capital knowledge
stock) with fantastically higher productivity.
Constant innovation ensures resources are infinite
Geddes 4 Writer and Libertarian Analyst (Marc, The monster non-socialist FAQ, 2/12,
http://rebirthofreason.com/War/MonsterFAQ.shtml)
A significant disruption

to supplies of critical resources can cause temporary problems, but in a free

market, if resources start to become scarce, prices rise, leading to a search of substitutes and
improved conservation efforts. The pool of resources is not fixed, because human ingenuity can
find substitutes or new sources of resources. Supplies of most raw materials have been increasing
throughout the 20th century, and the cost has been falling (See the entry on Natural resources). For instance, between
1950 and 1970, bauxite (aluminium source) reserves increased by 279 per cent, copper by 179 per cent, chromite (chromium source)
by 675 per cent, and tin reserves by 10 per cent. In 1973 experts predicted oil reserves stood at around 700 billion barrels, yet by
1988 total oil reserves had actually increased to 900 billion barrels. Production of certain kinds of

resources such as fossil fuels may finally be beginning to peak but there are renewable energy sources in

development which can serve as substitutes. Simplistic thermodynamic analysis of energy

production is misleading, because it's not the quantities of energy used or produced that determine
economic value, but the utility, or usefulness if that energy to humans. If energy is being used more
efficiently you don't need as much of it, and some forms of energy are more valuable than others- for instance kinetic
energy in the form of wind power is less valuable than the same quantity of latent energy in the form of oil. Solar power is a
virtually inexhaustible supply of new energy for stationary sources and the hydrogen fuel cell can serve for
transportation in place of fossil fuels. Developing these technologies costs money, so to avoid
resource shortages a good economy is essential. Libertarian capitalism is the system which generates
wealth the fastest.

Growth Solves Environment

Growth spurs resource and tech investment solves environment

Indur M. Goklany, 8/30/12, Analyst for the Department of Interior, Economic Growth and
the State of Humanity, PERC, http://perc.org/articles/economic-growth-and-state-humanityno-21
Improvements specific to health, food, and agriculture also benefit from a larger, more general cycle in which broad technological
change, economic growth, and global trade reinforce each other. Other technologiesinvented for other reasonshave led to
medical advances and improved productivity or reduced

the environmental impacts of the food and

agricultural sector. For example, computers, lasers, and global positioning systems per-mit
precision agriculture to optimize the timing and quantities of fertilizers, water, and pesticides,
increasing productivity while reducing environmental impacts. Plasticsessential for food packaging and
preservationalso Increase productivity of the food and agricultural sector. Transportation of every land in-creases the abiWto
move inputs and outpuWfrom farms to mar-kets, and vice versa. Broad advances in physics and engmeenng have led to new or
Improved medical technologies, including elec-tnaty (without which virtually no present day hospithl or operat; mg room could
fimction), x-rays, nuclear magnetic resonance; lasers, and refngeratio . These specific impacts do not exhaust the

benefits of broad economic growth, technological change, and global trade. Tech=I nological
change in general reinforces economic growth (Barr997;Goldany 1998)Allowing countries more
resources to research and develop technological improvement(Gbklany 1995) and to increase education.

No correlation between growth and environmental degradation

studies prove

CEPR 10 (Centre for Economic Policy Research, Economic Growth Sustainable Development,
CEPF, 2010, http://www.cepr.org/pubs/bulletin/meets/2246.htm)
There is no necessary conflict between economic growth and environmental protection, Ian Goldin
told a London lunchtime meeting in a joint presentation with Partha Dasgupta (University of Cambridge) on 7 June. Indeed, exactly the opposite is
true, he claimed: sustained economic growth is the key to improved environmental management. Goldin is Senior Economist at the European Bank for
Reconstruction and Development and formerly Senior Economist at the World Bank and Principal Economist at the OECD. His presentation drew on
The Economics of Sustainable Development, a volume he co-edited with Alan Winters (World Bank and CEPR), a joint project of the OECD
Development Centre and CEPR, and published by Cambridge University Press. The

relationship between economic growth

and indicators of air and water quality indicates that growth does not always contribute to
environmental degradation. The connection is highly dependent on income levels: there seems to be a Ushaped relationship between income and environmental quality for most pollutants . Quality
deteriorates in the early stages of growth but at higher levels of per capita income, it improves. The turning point varies according to
the pollutant. For example, the levels of suspended solids and toxic metals in air and water increase rapidly
as incomes approach middle income levels but then decrease. The link between income and pollution arises because
the composition of output changes with growth in favour of newer, cleaner technologies . The political
dimension is equally important: citizens in richer countries are more effective in articulating their demands
for a cleaner environment. Democratization may assist countries in getting over the pollution hump: greater participation contributes to
limiting local pollutants with a direct and immediate effect on health. By contrast, even the richest countries are only now acknowledging slower and
more indirect threats, such as carbon dioxide emissions.

Green growth makes increases in the economy sustainable

World Bank 12 (The World Bank, From Growth to Inclusive Green Growth: The Economics
of Sustainable Development, The World Bank Group, 2012-05-09,
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTSDNET/0,,contentMDK:231684
61~pagePK:64885161~piPK:64884432~theSitePK:5929282,00.html)
Well-designed inclusive

green policies improve social welfare, taking into account not only present but also future generations. Yet policy
also naturally concerned with the potential trade-offs and costs, as well as the potential co-benefits, of
green policies for near-term growth and employment. Careful case-by-case analysis will be needed to find optimal strategies, but there
makers are

is considerable evidence that near-term costs can be minimized through the use of well-designed
regulations and market-based policy instruments that promote least-cost ways of protecting the environment. Green growth can
then provide a pathway to more sustainable development that reconciles the urgent need for sustained growth with the
imperative of avoiding lock-in to unsustainable growth patterns and irreversible environmental damages. Green growth is not anti-growth;
rather, it represents a change in how we manage economies to reflect a broader conception of what constitutes
effective and sustainable growth. The ability and will to value natural capital underpins the
transition to greener growth . Environmental assets water, land, air, ecosystems and the services they provide represent a
significant share of a countrys wealth. Just like physical and human capital, natural capital requires investment, maintenance, and
good management if it is to be productive and fully contribute to prosperity. To accurately measure progress toward greener growth, countries
will find it useful to implement comprehensive wealth accounting and valuation of ecosystems alongside
their more conventional measures like GDP. Critically, there is no single green growth model. Green growth strategies will vary across countries,

all countries, rich

and poor, have opportunities to make their growth greener and more inclusive without slowing
it.
reflecting local preferences and contexts. Any single set of best practices should be imported with care. Nonetheless,

Growth solves environment increases tech and resources

John F. Barker, 12/2005, Ph.D in Biology, Is Economic Growth good for the Environment?
An approach to this question using the Environmental Kuznets Curve Hypothesis, Gaia
Foundation: Population, Growth & Migration, http://www.population-growthmigration.info/essays/economyk.html)
As a country becomes wealthier it can afford to spend more on research and development, leading to
the development of improved environmental technologies. Here public spending on environmental
research and development acts as a catalyst for private investment in developing new
technologies. 'Dirty' and obsolete technologies are replaced by upgraded new and cleaner
technologies. The consequence of such changes is that a given amount of goods can be produced
with successively reduced burdens on natural resources and the environment (Dinda, ibid). In other
words, methods of raw material extraction and manufacture of goods from these raw materials,
become more efficient, as do methods of pollution abatement. This line of argument leads to the subject of
'dematerialization' which we take up in the next section of this essay.

Growth Inevitable
Psychology makes the drive for growth inevitablepeople arent
satisfied with accepting less.

Friedman 5 (Benjamin M. Friedman, William Joseph Maier Professor of Political Economy at

Harvard University, former Chair of the Department of Economics at Harvard University, holds
a Ph.D. in Economics from Harvard University, 2005 (Rising Incomes, Individual Attitudes,
and the Politics of Social Change, The Moral Consequences of Economic Growth, Published by
Knopf Publishing Group, ISBN 0679448918, p. 80-82)
The key is that while

everybody of course wants to have more income [end page 80] so as to enjoy a higher
standard of living, better health, and a greater sense of security, our sense of what constitutes
more for any of these purposes is mostly relative. Whenever people are asked how well off they
think they are, they almost always respond by comparing their lives to some kind of reference
point. 4 Further, whether most people think what they have or how they live constitutes more or
less depends on how their circumstances compare to two separate benchmarks: their own (or
their familys) past experience, and how they see people around them living . The principal driving
force underlying the positive influence that economic growth has over peoples attitudes, and
through the political process therefore over the character of their society, is the interaction between
how each of these two respective points of comparison affects peoples perceptions . Obviously nothing
can enable the majority of the population to be better off than everyone else. But not only is it possible for most people to be
better off than they used to be, that is precisely what economic growth means . The central question is
whether, when people see that they are doing well (in other words, enjoying more) compared to the benchmark of their own prior experience, or their
parentsor when they believe that their childrens lives will be better still they consequently feel less need to get ahead compared to other people. If
so, then the

reduced importance they attach to living better than others leads in the end to more
wide-ranging benefits, for the society as a whole, whenever general living standards are increasing.

Happiness depends, of course, on more than just money and the things money can buy. In surveys, most people say that their sense of satisfaction with
their lives depends most on the strength of their family relationships and personal friendships, or their health, or their education, or their religious
attachment, or their feeling of connection to a broader community beyond their own family, or their sense of being engaged in purposeful and
productive work, or even on their everyday work environment. 5 In many surveys the single most important influence on adults happiness is whether
they are married. (People who are, or who are living together as if they were, are typically happier.) 6 People with extrovert personalities also tend to
be happier on average, perhaps simply because they have more friends. 7 Money

matters too, however. People with more income

typically enjoy not just a higher standard of living in terms of food, clothing, and housing but
also better health (in part because of better access to medical care, but also because they drink and smoke less and get more exercise). They
also have better educations and a stronger sense of security in the face of major life uncertainties. Familiar popular
images of the business rat race [end page 81] notwithstanding, people with higher incomes on average also have more
leisure time, and they mostly spend it in activities that foster the friendships they then say (in surveys) matter far more than money. Having at
least some financial resources is even helpful in maintaining marriages, perhaps because it allows young couples to live on their own instead of with
their parents. 8 At

any given time, within a given country, people with lower incomes are far more
likely to say that they are unhappy. 9 But the essential point is that how much income it takes to enjoy
advantages like these is a relative matter, and the most obvious benchmark people have in mind when they draw such comparisons is
their own past experience. People who live better now than they did before, or better than they recall their
parents living, are likely to think they are doing well. Those who look back on better times better
for them and their families, that is think they are not. As a result, psychological studies have repeatedly
confirmed that peoples satisfaction depends less on the level of their income than on how it is
changing. 10 But rising incomes are, in turn, what economic growth is all about.* * (footnote) The idea that
satisfaction depends primarily on changes in economic well-being (to the extent that economic factors are important in this regard) is hardly new.
Adam Smith observed that all men, sooner or later, accommodate themselves to whatever becomes their permanent situation. Hence between one
permanent situation and another, there [is], with regard to real happiness, no essential difference (The Theory of Moral Sentiments, p. 149). Moreover,
Smith claimed no originality for this view but attributed it to the Stoic philosophers of ancient Greece.

Growth Good Impacts

Collapse Causes Conflict

Global economic collapse leads to terrorism and war

Halal and Marien 11 (William E. Halal, Professor Emeritus of Management, PhD and MBA,
University of California, Berkeley AND Michael Marien, Ph.D. in social science and national
planning studies from the Maxwell School of Citizenship and Public Affairs at Syracuse
University; Global MegaCrisis: Four Scenarios, Two Perspectives, The Futurist 45.3, ProQuest,
May/Jun 2011)
The MegaCrisis, simply defined, is a global environmental and economic collapse or near collapse, along with
attendant problems of rising prices, mass protests, widespread psychic stress, and lawlessness. We present the following
tentative outline to better paint a picture of what MegaCrisis might look like. Some Trends Driving the
MegaCrisis * Climate Change, No Matter What. The year 2010 marked the hottest year (and decade) on record. The world has
already seen a 1F temperature rise, and an additional 4-6 rise is likely even if all proposed actions are taken. Expect possibly 10F
in the next few decades if greenhouse gases keep growing. In addition, the projected sea-level rise in the 2007 Intergovernmental
Panel on Climate Change (IPCC) report was 16 inches by 2100; now it is about three to six feet by 2100. Complicating this first point
is the fact that reducing CO2 is costly. The science indicates that greenhouse gases must be reduced by 60% from 1980 levels to
avoid severe climate change. This would cost roughly $20 trillion, or about 1% to 3% of global GDP, if done soon, but would be far
more costly if done later. The problem is even more daunting because most developing nations are likely to industrialize, and most
industrialized nations are likely to grow, increasing all these threats over the long term. * Political Will to Reduce CO2 Is Lacking.
There are as yet no global agreements that would decrease carbon emissions significantly. Meanwhile, China, India, and the United
States are planning to build a total of 850 coal-fired plants, adding five times as much CO2 to the atmosphere as present treaties
intend to reduce. * Methane May Be Worse Than CO2. Keep your eye on methane, a potent greenhouse gas that is 23 times worse
than CO2, although it doesn't stay in the atmosphere as long. Large quantities of methane are being released from thawing tundra in
the Arctic region, and still larger quantities may be released from icelike methane clathrates on the ocean floor in coastal areas. *
Freshwater Is Becoming More Scarce. Nearly a billion people lack clean water, and 2.6 billion lack good sanitation. Water tables are
falling on all continents, and the World Bank estimates that, by 2025, half of the world population could face water scarcity due to
climate change, population growth, and increasing demand for water. Unless major changes occur, global water shortages are likely
to cause mass migrations, higher food prices, malnutrition, and major conflicts. * Recession Likely to Last for Years.
The Great

Recession that began in 2008 is often compared to the Great Depression of 1930, which
lasted until 1940. The International Monetary Fund forecasts growth for the next two years at slightly above 2% in developed
nations, although it should remain at 8% in the developing world. Some economists think unemployment rates between
8% and 9% are quite likely for several years, much like Japan's "lost decade" in the 1990s. * Severe
Institutional Failures. The near collapse of the world's financial system in 2008 highlighted structural
failures in the financial industry, government, and other institutions . A study of 1,500 CEOs noted: "The
world's leaders think their enterprises are not equipped to cope with complexity in the global environment." Nobel Prize-winning
economist Joseph Stiglitz wrote, "The financial collapse may be to markets what the Berlin Wall was to Communism." *
Cyberwarfare/Cyberterrorism. Computer hacking is growing, commensurate with the boom in global ecommerce. U.S.

military networks, nuclear facilities, banks, air-trafficcontrol systems, and

electrical grids are under constant attack. The U.S. Naval War College was shut down by hackers for more than two
weeks in 2006. The threat is so great that one expert suggested installing "cyberwar hotlines" similar to the special phones that the
United States and Soviet Union used to avoid nuclear Armageddon. * Weapons of Mass Destruction. The old status quo
of MAD (mutually assured destruction) may

have kept two superpowers locked in a stalemate, but it is no

longer viable with nine contending nuclear powers (and more likely to emerge, including terrorist groups).
Between 1993 and the end of 2009, the Illicit Trafficking Database recorded 1,784 nuclear trafficking incidents. Suddenly, many of
the concerns we were forewarned of over recent decades are at hand. The future is arriving- and with a vengeance. There is a
palpable and widespread fear that the present world is unsustainable and that events could easily spin out of control. Scientists are
convinced that a 60% reduction in carbon-dioxide emissions is needed to stave off ruinous climate change, but achieving that goal
looks so unrealistic that many are girding to withstand a significant rise in sea levels, scorching heat, withering droughts, and more
extreme weather patterns. Policy makers in major world capitals, including Washington, are seriously considering geoengineering
the planet as a last-ditch effort to stave off disaster. The Mega- Crisis represents what could occur if the human

species fails to transform its economies, technologies, politics, and lifestyles into something
more sustainable within the next two decades.

An unstable economy causes warempirics prove

Mead 09 (Walter Russell Mead, James Clarke Chace Professor of Foreign Affairs and the
Humanities at Bard College, BA from Yale, Henry A Kissinger Senior Fellow for US Foreign
Policy, Only Makes You Stronger: Why the Recession Bolstered America, The New Republic,
http://www.freerepublic.com/focus/news/2169866/posts, February 4, 2009)
But, in many other countries where capitalism rubs people the wrong way, this is not the case. On either side of the Atlantic, for
example, the Latin world is often drawn to anti-capitalist movements and rulers on both the right

and the left. Russia, too, has never really taken to capitalism and liberal society--whether during the time of the czars, the
commissars, or the post-cold war leaders who so signally failed to build a stable, open system of liberal democratic capitalism even
as many former Warsaw Pact nations were making rapid transitions. Partly as a result of these internal cultural

pressures, and partly because, in much of the world, capitalism has appeared as an unwelcome
interloper, imposed by foreign forces and shaped to fit foreign rather than domestic interests
and preferences, many countries are only half-heartedly capitalist. When crisis strikes, they are
quick to decide that capitalism is a failure and look for alternatives . So far, such half-hearted experiments
not only have failed to work; they have left the societies that have tried them in a progressively worse position, farther behind the
front-runners as time goes by. Argentina has lost ground to Chile; Russian development has fallen farther behind that of the Baltic
states and Central Europe. Frequently, the crisis has weakened the power of the merchants, industrialists,

financiers, and professionals who want to develop a liberal capitalist society integrated into the world. Crisis can also
strengthen the hand of religious extremists, populist radicals, or authoritarian traditionalists
who are determined to resist liberal capitalist society for a variety of reasons . Meanwhile, the
companies and banks based in these societies are often less established and more vulnerable to the consequences of a
financial crisis than more established firms in wealthier societies. As a result, developing countries and countries
where capitalism has relatively recent and shallow roots tend to suffer greater economic and political
damage when crisis strikes--as, inevitably, it does. And, consequently, financial crises often reinforce rather than
challenge the global distribution of power and wealth. This may be happening yet again. None of which means that we can just sit
back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but
it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year
rise of the liberal capitalist system under the Anglophone powers, so

has war. The wars of the League of Augsburg

and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars;
the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic
times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned
German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression,
what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet,
decline, but, if we can't get the world economy back on track, we may still have to fight .

Interdependence Prevents War

Trade and econ interdependence promotes long term peace and
stability as well as short term conflict preventionSouth China Sea
countries prove

Weissmann 10 (Mikael Weissmann, Research Fellow at Swedish Institute of International

Affairs, has a M.Soc.Sci. in Peace and Conflict Studies from Uppsala University (2003) and a
B.A. in International Relations and Economics from University of Queensland, Australia (2000),
his research focuses on IR, conflict management, and peacebuilding, and is an expert on China
and Southeast Asian region, THE SOUTH CHINA SEA CONFLICT AND SINO-ASEAN
RELATIONS: A STUDY IN CONFLICT PREVENTION AND PEACE BUILDING*, Asian
Perspective, Vol. 34, Issue 3, pg. 35-III, 2010)
Beneath the processes just mentioned lies economic integration and interdependence in East Asia,
including between China and ASEAN. The focus on economic growth and prosperity has been both a
common regional policy goal and a driving force in the regionalization process. The whole region,
with the possible exception of North Korea, seeks peace, security, and prosperity. In East Asia, deep economic
integration and interdependence is a relatively recent phenomenon. Central for this takeoff was the founding of the Asia-Pacific
Economic Cooperation forum in 1989 and the ASEAN Free Trade Area (AFTA) in 1992. Since the early 1990s, integration and
interdependence have increased dramatically. Bilateral trade between China and ASEAN jumped fifteen fold between 1991 and
2005, when it reached $130.3 billion.63 A bold step was taken in November 2002 when China arranged a China-ASEAN Free Trade
Area (CAFTA).64 CAFTA came into force on January 1, 2010. The process of implementing CAFTA is important

beyond its economic benefit, as it forms part of China's diplomatic policy to win trust among the ASEAN
members by "giving more and taking less" (duo yu shao qu).65 Furthermore, it is an important catalyst for the overall
East Asian regionalization and community-building process, described as "an initial step towards the
realization of an East Asian community."66 Economic integration and interdependence have both
shortterm conflict prevention potential and longer-term peace building capability. In the short
term, it increases the cost of military conflict, thereby increasing the incentive to pursue
nonviolent paths. This has been an important incentive for the states to avoid confrontations or conflict
escalation over what the parties perceived as nonessential issues.67 The benefits of economic cooperation
simply overshadow those problems, since none of the parties wants to risk undermining the
benefits from economic cooperation by triggering an escalation of conflict in the South China Sea.
For longer-term peace building, integration and interdependence have been important in
promoting conditions conducive to peace, both by itself and through spillover effects. In line with
functionalist predictions, the economic sphere is the engine that intensifies other non-economic regionalization processes. As
observed by one senior analyst in a Chinese government think tank, "all East Asian countries take East Asian

economic cooperation as [a] first step in the East Asian community building process ."68 That is, it
works as an important platform for East Asian identity building, influencing how the participants
perceive and behave toward each other, and how they construct their interests. The interaction in the
economic sphere has also built trust and understanding, which in turn has spread to other more
sensitive issue areas. This applies both through spillover, as predicted by functionalist theories (although there
has been no infringement on sovereignty), and through trust and understanding on a more informal and personal
level, which is important for successful negotiation and communication .

Free trade and interdependent national economies checks war

Griswold 98 (Daniel Griswold, associate director of the Center for Trade Policy Studies at the
Cato Institute, Peace on Earth, Free Trade For All,
http://www.cato.org/publications/commentary/peace-earth-free-trade-men, December 31,
1998)

Open trade makes war a less appealing option for governments by raising its costs . To a nation
committed to free trade, war not only means the destruction of life and property . It is also terrible for
business, disrupting international commerce and inflicting even greater hardship on the mass of
citizens. When the door to trade is open, a nations citizens can gain access to goods and resources outside their borders by offering
in exchange what they themselves can produce relatively well. When the door is closed, the only way to gain access is through
military conquest. As the 19th century Frenchman Frederic Bastiat said,

When goods cannot cross borders,

armies will . History demonstrates the peaceful influence of trade . The century of relative world
peace from 1815 to 1914 was marked by a dramatic expansion of international trade, investment and
human migration, illuminated by the example of Great Britain. In contrast, the rise of protectionism and the
downward spiral of global trade in the 1930s aggravated the underlying hostilities that propelled
Germany and Japan to make war on their neighbors. In the more than half a century since the end of World
War II, no wars have been fought between two nations that were outwardly oriented in their
trade policies. In every one of the two dozen or so wars between nations fought since 1945, at least one side was
dominated by a nation or nations that did not pursue a policy of free trade. In the recurring Middle East
wars between Israel and its Arab neighbors, dating back to 1948-49, none of the direct participants were what could be described as
open economies at the time of conflict, with the Arab countries enforcing a virtual boycott of trade with Israel. Saddam Hussein, the
instigator of the 1991 Persian Gulf War, could be described in many ways, but not as a free trader. Wars have been fought between
members of the General Agreement on Tariffs and Trade, but only when at least one of the warring sides was protectionist in its
trade policies. For example, India and Pakistan were both members of GATT during their 1965 and 1971 conflicts, but they were also
both committed to protection as a trade policy. Great Britain and Argentina were members of GATT when they fought over the
Falklands in 1982, but Argentina, the aggressor in that conflict, was at the time still under the protectionist spell of Peronism.
After the nightmare of two world wars, the United States encouraged the nations of Western Europe

to form a free-trade area not only to promote economic development but also to reduce
international rivalries. Decades of trade liberalization have helped to make war among members
of the European Union virtually unthinkable today or in the foreseeable future. A growing web of
international investment has also strengthened peace among nations . New York Times columnist Thomas
Friedman has pointed out what he calls the Big Mac thesis: that no two nations with McDonalds franchises have
ever gone to war. A nation open enough and developed enough to be a profitable home for an established international
franchise such as McDonalds will generally find war an unattractive foreign policy option.

Strong and interdependent economies check conflict

McKinnon 04 (Don McKinnon, the Secretary-General of the Commonwealth of Nations

(organization of member states that were mostly territories of the British Empire), Conflict
Resolution: A Commonwealth Perspective, RUSI Journal Vol. 129, issue 2, pg. 16-20, ProQuest,
April 2004)
sound economic
development and strong trade relations can prove powerful ingredients of stability and antidotes to conflict. If the
stability of your economy and the well-being of your population depend on trading with your
neighbour, you will think twice about going to war with them. European leaders, after the second
World War, understood this very well: with the establishment of the European Economic Community, they
decided to link their economies together through trade so that they would never go to war again .
But trade will only work as a force for peace if it is fair . For many years, developing countries have been told that
Peace and stability are not only achieved through efforts at the political and diplomatic levels, and

the only way to prosperity was through trade liberalization, but while poor countries have heeded this advice and removed many of
their trade barriers, many developed countries failed to reciprocate. In precisely those sectors where developing countries have a
comparative advantage, such as agriculture and textiles, developed countries have protected themselves through both tariff and nontariff barriers, and extensive systems of domestic subsidies resulting in dumped exports.

Key Sectors

Aerospace
Aerospace industry key to US economy innovation, exports, jobs,
tech

ITA 11 (International Trade Administration, an organization that promotes trade for American companies internationally. The
article quotes Francisco Snchez, Under Secretary of Commerce for International Trade. Snchez works for the ITA and U.S.
Department of Commerce, appointed under Obama. Snchez was Assistant Secretary for Aviation and International Affairs at the
U.S. Department of Transportation under Clinton. June 11, 2011 Aerospace Industry Is Critical Contributor to U.S. Economy
According to Obama Trade Official at Paris Air http://trade.gov/press/press-releases/2011/aerospace-industry-criticalcontributor-to-us-economy-062111.asp)
The U.S.

aerospace industry is a strategic contributor to the economy, national security, and

technological innovation of the United States, Snchez said. The industry is key to achieving the
Presidents goals of doubling exports by the end of 2014 and contributed $78 billion in export sales to the
U.S. economy in 2010. During the U.S. Pavilion opening remarks, Snchez noted that the aerospace sector in the
United States supports more jobs through exports than any other industry . Snchez witnessed a signing
ceremony between Boeing and Aeroflot, Russias state-owned airline. Aeroflot has ordered eight 777s valued at $2.1 billion, and the
sales will support approximately 14,000 jobs. The 218 American companies represented in the U.S. International Pavilion
demonstrate the innovation and hard work that make us leaders in this sector, said Snchez. I am particularly pleased to see the
incredible accomplishments of U.S. companies participating in the Alternative Aviation Fuels Showcase, which demonstrates our
leadership in this important sector and shows that we are on the right path to achieving the clean energy future envisioned by
President Obama. The 2011 Paris Air Show is the worlds largest aerospace trade exhibition, and features 2,000 exhibitors,
340,000 visitors, and 200 international delegations. The U.S. aerospace industry ranks among the most

competitive in the world, boasting a positive trade balance of $44.1 billion the largest trade surplus of
any U.S. manufacturing industry. It directly sustains about 430,000 jobs, and indirectly supports more
than 700,000 additional jobs. Ninety-one percent of U.S. exporters of aerospace products are
small and medium-sized firms.

Aerospace key to econ jobs, exports, and competitiveness

AIAA 12 (American Institute of Aeronautics and Astronautics, the worlds largest technical society dedicated to the global
aerospace profession to address the needs and interests of the aerospace workforce. AIAA annual report for 2012 Key Issues2012
http://www.aiaa.org/2012KeyIssues/)
Continued stability

of the U.S. aerospace and defense (A&D) industrial base is critical to our economy,
national security, infrastructure, and future workforce . The A&D industry is facing one of its greatest challenges
in history as Congress and the Administration deal with mounting national debt and the need to balance the federal budget. All
federal agencies face significant budget reductions, with the Department of Defense (DoD) potentially bearing the biggest burden.
While all areas must be examined to identify unnecessary spending that can be reduced or eliminated to help lower the federal
budget deficit and national debt, we must make sure that the nations future is not mortgaged to address todays crisis. The

aerospace and defense industry employs more than one million people. Annual sales are nearly
$331 billion and the industry supports more than two million middle-class jobs . Aerospace sales
alone account for $77.5 billion in exports, providing the economy with a foreign trade surplus of
more than $50 billion. Conservatively, U.S. aerospace sales account for three to five percent of our countrys gross domestic
product (GDP). The industrys workforce is highly skilled and leads our nation in global competitiveness,
providing current and future opportunities for young people to have high-paying careers that will keep the industry strong
for the future while advancing our national and economic security.

Agriculture
Ag industry key to the economy demand is on the rise and spurs
innovation

Weber 11 (Vin Weber, former Congressman, Co-Chairman of Mercury/Clark & Weinstock, government relations and public affairs company, and advisor to Americans
for Choice and Competition in Agriculture Agricultural innovation and exports key to Americas economic resurgence 11/20/11 http://thehill.com/blogs/congressblog/economy-a-budget/200461-agricultural-innovation-and-exports-key-to-americas-economic-resurgence//)

Last year, the United States exported more than $108 billion worth of agricultural products accounting
for more than 10 percent of all U.S. goods sold abroad. From a macroeconomic point of view, the American farmer is unique
among business sectors. With the United States running persistent trade deficits, American farmers ran a $42 billion trade surplus in 2010. Despite economic weakness in traditional
markets, demand for U.S. agricultural exports is growing, up 45.44 percent in the last five years. As
incomes rise globally and population shifts to cities, more and more of the worlds population is
coming to rely on agricultural goods produced far from their homes. Growing up in rural Minnesota and later representing a Corn Belt district for 12 years in the House
of Representatives, I know this country has immeasurable agricultural advantages . American farmers till some
of the most fertile land in the world and employ techniques and machinery that make them the
most productive anywhere. Further, this country has the trucking capacity, railways and seaports to deliver its agricultural
goods to every part of the globe. Farming, however, is also quickly evolving as advances in seed technologies boost
yields, and with it, profits and exports. As in so many other areas of industry, these technological advances have outstripped the legal and regulatory frameworks established to
ensure a free and open marketplace. As farmers lead Americas export resurgence from rural Minnesota, Californias Central Valley and out on the Plains, these regulatory structures must be updated to allow

crop protection industries have structures in place to support the

introduction of technologies that go off patent also called generics which has spurred the creation of new and
better products. Like with pharmaceuticals, the public has an overriding interest in the promotion of generic
alternatives. Blocking competition of products with generic ingredients keeps prices artificially high, curbs choices in the marketplace, and blocks other innovators from employing technologies that
should have entered the public domain. From the standpoint of technological innovation, agriculture is no different
than smartphones or pharmaceuticals. Innovators must be given reasonable access to regulatory information on patented products so that once-groundbreaking
technologies can be built upon and improved allowing a new generation of technologies to come to market. Competition and free enterprise are the
engines of American innovation. Patent rights are integral to this system but so is unfettered access to post-patent technologies. We need to
recognize that agriculture is now at the cutting edge of innovation and requires regulations that
meet the dynamic needs of an evolving sector. As has been the case for more than a century, American farmers feed the world. The difference now and into
the future is the growing wealth and standard of living outside traditional markets for U.S. agricultural products. Individuals that were once recipients of U.S. aid are now paying
customers for U.S. agricultural exports. With the Administration set on doubling exports by 2015 a goal supported by lawmakers on both sides of the aisle
the agricultural sector is poised to lead the American export resurgence. It would be a shame for Congress to ignore this issue
farmers access to seeds best suited to their land, their families and their businesses. Both the pharmaceutical and

as bad regulations derail this American success story.

Agriculture key to economic diversity Virginia proves

Crane 13 (John R. Crane Diversified agriculture a boost to economy Friday, March 29, 2013

http://www.newsadvance.com/go_dan_river/news/pittsylvania_county/article_d898ccd8-98c1-11e2-9c20-001a4bcf6878.html )

Other agricultural products have filled part of the tobacco void, Rephann and others stated in the study. Livestock
and dairy farming have increased, vaulting them into first place as a source of farm cash receipts. In addition, hay crops, fruits and vegetables,
equine, agritourism, specialty products and direct sales have grown in importance . Farming in the region is more than cows, milk

and tobacco, and thats better than relying on a single product, Stauber said. The Danville Regional Foundation provided a $25,000 grant to pay for the study, which was

A more diversified agriculture represents a more vibrant

economy, Stauber said Friday. Its not wise for a region to concentrate risk in one enterprise, such as beef cattle or tobacco, Stauber said. When times are
bad for one farmer, they will be for all in that type of economy , he said. Its better for an area to offer a variety of products.
Youre spreading risk across a number of different opportunities, rather than concentrating risk in one enterprise, Stauber said. The economic impact of
agribusiness including forestry and agriculture accounted for $1.2 billion and more than
7,000 jobs in the region in 2011, according to the study. Stauber said those numbers were impressive. The $1.2 billion included anything produced by firms
commissioned by the Old Dominion Agriculture Foundation.

in the Danville/Pittsylvania County area, Rephann said. It included products sold, re-used and made into an item such as lumber made into furniture, grapes into wine or
tobacco into cigarettes, Rephann said. It also included indirect

economic inputs from farmers or other agribusiness owners

purchasing products from Southern States or paying their accountants, for example, Rephann said. Induced inputs employees in related industries (such as
Southern States) who spend that money at restaurants, gas stations and stores, for example were also included in the overall economic impact, Rephann said.

Biotech
Biotech key to multiple sectors in scientific research and economic
development
OTA 1991 (Office of Technology Assessment U.S. Congress, Biotechnology in a Global
Economy, OTA-BA-494 Washington, DC: U.S. Government Printing Office, October 1991
http://ota.fas.org/reports/9110.pdf).

Biotechnology is not an industry. It is, instead, a set of biological techniques, developed through
decades of basic research, that are now being applied to research and product development in
several existing industrial sectors. Biotechnology provides the potential to produce new,
improved, safer, and less expensive products and processes. Pharmaceuticals and diagnostics for
humanS and animals, seeds, entire plants, animals, fertilizers, food additives, industrial
enzymes, and oil-eating and other pollution degrading microbes are just a few of the things that
can be created or enhanced through the use of biotechnology. Many early claims about
biotechnology, seen in retrospect, were premature. Products have not been developed and
marketed as quickly as previously thought possible, and many scientific and public policy issues
remain to be settled. However, biotechnology has arrived as an important tool for both scientific
research and economic development. Its effect on the worlds economy will certainly grow in the
years ahead, as research leads to new products, processes, and services. Financing of
Biotechnology The competitiveness of U.S.-developed biotechnology products and processes
may ultimately depend on broad issues, e.g., fair trade practices, protection of intellectual
property, regulatory climate, and tax policies. The competitiveness of U.S. innovation, however,
could very well rely on the ability of biotechnology companies to stay in business. Because
biotechnology is capitalintensive, staying in business means raising substantial sums of cash.
Start-up companies fundamental need for cash, coupled with the desire of venture capitalists in
the United States to profit from the creation of high-value-added products (based on cuttingedge technology) have led to the financial communitys substantial involvement in the formation
of biotechnology-based firms. Venture Capital and the Dedicated Biotechnology Company The
United States has led the world in the commercial development of biotechnology because of its
strong research base-most notably in biomedical sciences--and the ability of entrepreneurs to
finance their ideas. During the early 1980s, a combination of large-scale Federal funding for
basic biomedical research, hype surrounding commercial potential, and readily available
venture capital funding led to the creation of hundreds of dedicated biotechnology companies
(DBCs).

Independently key to
a. Pharmaceutical industry

OTA 1991 (Office of Technology Assessment U.S. Congress, Biotechnology in a Global

Economy, OTA-BA-494 Washington, DC: U.S. Government Printing Office, October 1991
http://ota.fas.org/reports/9110.pdf).
Although the arrival of products has been slower than expected, the development of
biotechnology-based pharmaceutical products is flourishing. To date, 15 biotechnology-based
drugs and vaccines are on the market (see table 1-2). Both DBCs and established multinational
pharmaceutical companies are utilizing the tools and techniques of biotechnology in their drug

development efforts. Revenues in the United States from biotechnologyderived products were
estimated to be approximately $1.5 billion in 1989, and $2 billion in 1990. Many new products
are in the pipeline, and several 100 biotechnology drugs and vaccines undergoing human testing
for a variety of conditions, 18 have essentially completed clinical trials and are awaiting Food
and Drug Administration (FDA) approval. Biotechnology is particularly important for research
involving drug discovery as it allows for a molecular and cellular level approach to
understanding disease, drug-disease interaction, and drug design. Biotechnology is likely to be
the principal scientific driving force for the discovery of new drugs and therapeutic chemical
entities as the industry enters the 21st century. The modern pharmaceutical industry is a global,
competitive, high-risk, high-return industry that develops and sells innovative high-value-added
products in a tightly regulated process (see table 1-3). Because of the strong barriers to entry
which characterize the global pharmaceutical industry, many DBCs are focusing on niche
markets and developing biotechnology-based pharmaceutical products. Established
pharmaceutical companies have been increasingly developing in-house capabilities to
complement their conventional research with biotechnological techniques for use as research
tools. Strategic alliances and mergers between major multinational pharmaceutical companies
and DBCs allow both to compete in the industry and combine their strengths: the innovative
technologies and products of those DBCs with financial and marketing power blended with the
development and regulatory experience of the major companies. The original intent of many of
the early DBCs was to become fully integrated, competitive pharmaceutical companies, but the
economic realities of the pharmaceutical business will likely deny this opportunity to most
DBCs. Biotechnology, while not likely to fundamentally change the structure of the
pharmaceutical industry, has provided a much needed source of innovation for both research
and product development. Currently, much of the success or failure with the commercialization
of biotechnology in the pharmaceutical industry rests on economic, market, scientific, and
technical considerations. Government policies that affect these conditions contribute to, but are
not likely to independently determine, success or failure

b. Chemical industry

OTA 1991 (http://ota.fas.org/reports/9110.pdf U.S. Congress, Office of Technology

Assessment, Biotechnology in a Global Economy, OTA-BA-494 (Washington, DC: U.S.
Government Printing Office, October 1991).
The chemical industry is one of the largest manufacturing industries in the United States and
Europe. Currently, over 50,000 chemicals and formulations are produced in the United States.
The consumption of chemical products by industry gives these products a degree of anonymity
as they usually reach consumers in altered forms or as parts of other goods. Biotechnology has a
limited, though varied, role in chemical production. The production of some chemicals now
produced by fermentation, such as amino acids and industrial enzymes, may be improved using
biotechnology. Similarly, biotechnology can be used to produce enzymes with altered
characteristics (e.g., greater stability in harsh solvents or greater heat resistance). In many
instances, biotechnology products will probably be developed and introduced by major firms
without the fanfare that has accompanied other biotechnology developments and, like much of
chemical production, will remain unknown to those outside the industry.

Business Confidence
Biz con key to the economy

Dhingra 7/18 (Rohit, Sr. Manager Business Development, Expectations on Economy Turn
Negative, Business Today's Business Confidence Survey Shows
http://finance.yahoo.com/news/expectations-economy-turn-negative-business152500273.html)
The turmoil in the foreign exchange market undid the gains of the last three quarters and the
confidence level of businesses has dipped for the first time in four quarters. Some 75 per cent in the
latest Business Today-C fore Business Confidence Survey say the economic situation will worsen in the July-September quarter.
Two-thirds of the respondents said the current state of governance has made them look overseas for investment opportunities. The

dramatic dip in sentiment has come on the heels of a large number of respondents turning
upbeat about economic prospects after the last Union Budget. Forty-five per cent of the
respondents were hopeful that the budget would have a positive impact on their company's
performance. Earlier, the government had announced a series of economic reforms such as partial deregulation of diesel prices,
permitting foreign investment into organised retail, setting up of the Cabinet Committee on Investments, amendments to the land
acquisition bill, and clearing the Banking Laws (Amendment) Bill, 2011, among others. The combined impact of these

measures and the Union Budget had resulted in an increase in confidence level for three
consecutive quarters. On a scale of 100, confidence levels fell to 48.7 for April-June quarter, the
lowest ever score recorded in the ten consecutive quarters that the survey has been conducted.
Apr- Jan- Oct- Jul- Apr- Jan- Oct- Jul- Apr- Jan- June Mar Dec Sept Jun Mar Dec Sep Jun Mar 2013 2013 2012 2012 2012 2012
2011 2011 2011 2011 Overall Business confidence index 48.7 54.5 53.8 52.4 49.3 55.4 52.3 56.8 64.4 74.8 Business confidence index
for Heavy Engineering 46.6 50.6 50.2 49.5 48.3 52.7 50.4 55.1 62.3 73.4 Business confidence index for Light industry 48.2 54.2 52.3
51.9 48.7 53.2 51.8 56.3 64.1 74.5 Business confidence index for Services 50.8 57.7 56.8 55.5 52.4 59.5 55.2 58.6 65.7 75.7 Business
Today-C fore Business Confidence Survey, which has captured the mood of corporate India for ten quarters now, has become a
bellwether of business and economic sentiment since its inception in January-March 2011. The first survey recorded the highest-ever
confidence level at 74.8. In the latest round of the survey, 93 per cent respondents said they believed their profits will remain the
same or worsen in the July-September quarter, and 62 per cent expect hiring to remain unchanged or worsen. "If the government
were to create a systematic plan to dent confidence, it couldn't have done a better job," said Rahul Bhasin, Managing Director,
Baring Private Equity Partners (India). Industry is constantly watching the rupee, which has lost some 10 per cent against the US
dollar since April, as it has begun to have a significant impact on decision making. "Many companies and investors are either holding
back or postponing their investments, waiting for the rupee to reach the right level against the US dollar," said Shekar Viswanathan,
Vice Chairman and Whole-Time Director, Toyota Kirloskar Motor. Aroon Purie, Editor-in-Chief, India Today Group, of which

Business Today is a part, said the survey results indicates the economy may not yet have
bottomed out. "The survey results reflect the vulnerability of the economy to external shocks.
Much more needs to be done on the twin fronts of economic reforms and government decision
making to move the needle on business confidence decisively."

Competitiveness
U.S. needs competitiveness for a successful economy

Brodwin 12 (David, cofounder and board member of American Sustainable Business Council, discussing ideas of Michael
Porter, author and professor at Harvard Buisness School. A New Look at U.S. Economic Competitiveness September 4, 2012
http://www.usnews.com/opinion/blogs/economic-intelligence/2012/09/04/a-new-look-at-us-economic-competitiveness)
Michael Portercorporate strategy guru, author, and professor at Harvard Business Schoolis worried about Americas
competitiveness. Weve been losing ground since around 2000, he says, long before the housing bubble burst.
"Virtually all the net new jobs created over the last decade were in local businessgovernment, healthcare, retail [that are]
not exposed to international competition." Meanwhile, the U.S. economy has failed to create many
jobs in the big, strategically important, globally competitive industries. Competitiveness Redefined Porter and his

colleagues at Harvard Business School have taken a new look at national competitiveness, one that raises deep questions about our
economy, our businesses, and our politics. He and his team explained their ideas in a series of interviews in Harvard Magazine.
Porter and his colleagues boldly redefine what it means for the United States to have a competitive economy. Jan Rivkin, who heads
the strategy unit at Harvard Business School explains: "U.S. competitiveness [is] the ability of firms in the U.S.

to succeed in the global marketplace while raising the living standards of the average American ."
This approach to measuring national competitiveness spans the partisan divide . Conservatives
usually focus on how well corporations are doing, and liberals usually focus on the living standards and how income is distributed.
Rivkins definition takes a "both/and" approach rather than an "either/or" approach. An economy cant succeed if

companies dont want to locate there, or if they cant operate profitably there. But at the same
time, an economy isnt successful if most of the people in it experience a stagnant or declining
standard of living. Both kinds of success are important, and each depends, in part, on the other .

Competitiveness key to economic growth creates multiple sectors

GMA News 11 (GMA News is a news company the reports on multiple issues Sustaining competitiveness is key to rapid growth NEDA
October 18, 2011 http://www.gmanetwork.com/news/story/278792/economy/business/sustaining-competitiveness-is-key-to-rapid-growth-neda)

Sustaining economic growth through coherent policies and programs remains the biggest challenge under the governments five-year

development plan. We need to develop and implement coherent policies and programs, including labor policies and programs, in order to achieve a sustained growth, said Socio-economic Planning head

improving and sustaining competitiveness is the key to rapid and

sustained growth. The Philippines has improved its competitiveness rank to 65th this year from 75th in 2011 out of 142 countries. The Philippines' Asian neighbors, Indonesia, Malaysia and
Thailand are ranked 50th, 27th and 38th, respectively. We aim to be among the top one-third of countries and this means moving up at least 27 notches, Balisacan said. Competitiveness
ranking is based partly on the quality of governance , which the Philippines has improved in by 31 notches. The factor that
continues to pull down our ranking is labor market efficiency, admitted Balisacan. The challenge is to be
able to improve on this but not at the expense of ensuring decent work and social protection for
all. He pointed out that the government continues to invest in the health and education, skills
training, technology and innovation, and infrastructure to create an environment that
encourages private investment to increase labor productivity.
Arsenio Balisacan in a statement Thursday. He also said

Consumer Spending
A lack of consumer spending directly correlates with a slow economy
absent a stimulant the economy will come to a halt

NBC News 5/31 2013 (Lucia Mutikani Consumer spending slips in sign US economy slowed
http://www.nbcnews.com/business/consumer-spending-slips-sign-us-economy-slowed6C10146786)
Consumer spending fell in April for the first time in almost a year and inflation pressures were
subdued, pointing to a slowdown in economic activity, which should allow the Federal Reserve
to maintain its monetary stimulus for a while. The Commerce Department said on Friday consumer spending fell
0.2 percent, the weakest reading since May last year, after edging up 0.1 percent in March. Economists had expected a 0.1 percent
gain. Consumer spending, which accounts for about 70 percent of U.S. economic activity, was

held down by weak demand for utilities and a drop in receipts at gas stations on the back of a fall
in gasoline prices at the pump. When adjusted for inflation, spending nudged up 0.1 percent last month
after rising 0.2 percent. The sixth straight month of gains in the so-called real consumer spending came as a key inflation
gauge fell in April by the most since July last year, pushed down by declining gasoline prices. That modest rise suggested
that consumer spending would slow in the second quarter after accelerating at a 3.4 percent
annual pace in the first three months of the year. "Consumer spending is on a very modest track
because income is not growing very much. Wage gain is very low even though job growth has
picked up," said Kevin Logan, chief U.S. economist at HSBC Securities in New York. U.S.
Treasuries prices extended gains after the data, while stock index futures were lower in morning trade. The economy has been
hit by higher taxes and deep government spending cuts as the government tries to slash its budget deficit. It grew at a 2.4 percent
pace in the January-March period, but is expected to slow to a rate of between 1.5 percent and 2.2 percent

this quarter because of the government budget cuts, which are already putting a strain on
manufacturing. Lack of income growth as job gains remain moderate is weighing on domestic
demand. Last month, income was flat and the saving rate was unchanged at 2.5 percent. The weak
demand tone was underscored by very benign inflation pressures in April. A price index for consumer spending fell
0.3 percent last month after dipping 0.1 percent in March. A core reading that strips out food and energy costs
was flat after rising 0.1 percent the prior month. Over the past 12 months, inflation has risen just 0.7 percent, the smallest gain since
October 2009 and pushing further below the Federal Reserve's 2 percent target. The index had increased 1.0 percent in the period
through March. Core prices were up 1.1 percent, the smallest rise since March 2011 and slowing from 1.2 percent in March. The

weak spending and the lack of inflation pressures should dampen market speculation the Fed
might start scaling back monetary easing later this year. Fed Chairman Ben Bernanke said last
week a decision to start tapering the $85 billion in bonds the Fed is buying each month could
come at one of its "next few meetings" if the economy appeared set to maintain momentum.

Consumer Spending key to the economy

NY Daily 5/27 (Elizabeth Lazarowitz, Consumer spending, jobless claims data hint economy
moving forward, but stuck in first gear Stocks spike on modestly upbeat data, hopes for
continued Fed stimulus, http://www.nydailynews.com/news/national/spending-jobs-datapoint-modest-growth-article-1.1384549)
Consumers stepped up their spending in May, a sign they are still nudging the economy forward .
Personal expenditures rose 0.3% last month, reversing a 0.3% slide in April, the Commerce
Department said. Consumer spending, which powers about 70% of U.S. economic growth, has
largely fended off the blow of higher taxes and spending cuts that kicked in this year. A surge in
contracts to buy previously owned homes and a dip in claims for unemployment benefits last week also pointed to further healing in
the economy on Thursday. Still, the data did little to change expectations among many economists for a tepid second quarter. "We

continue to grind forward in terms of consumer spending and economic growth, but we're

hardly shooting out the lights," Christopher Probyn, chief economist at State Street Global
Advisors, told the Daily News. "It seems like the improvement in the economy isn't going to be
second quarter event. It's going to be second half at the earliest." Pending home sales offered more evidence of the housing
market's recovery, rising 6.7% to the highest level in about 6-1/2 years, according to the National Association of Realtors. The
Labor Department, meanwhile, said jobless claims fell by 9.000 to 346,000, and a less volatile
four-week moving average also fell. The modestly upbeat economic data and soothing words
from Federal Reserve officials sent stocks shooting higher on Thursday . The Dow surged 114 points to
15,024.49, notching its third day in a row of triple-digit gains. New York Federal Reserve Bank President William Dudley said the
Fed would keep up its aggressive stimulus efforts longer than the timeline it recently laid out if economic growth is weaker than
expected.

Hegemony
US economic security rests on hegemonic power

Dymski 02 (Gary A. Dymski Feb 13, 2002 Post-Hegemonic U.S. Economic Hegemony: Minskian and Kaleckian Dynamics in
the Neoliberal Era http://economics.ucr.edu/papers/papers02/02-13.pdf)

Hegemony means a nations ability to determine the terms and conditions on which crossborder exchanges of goods, services, and financial assets are made. A global hegemon can
dictate these terms and conditions globally

A hegemon is not responsible for maintaining prosperity in its sphere of influence; but to
continue as hegemon it must at least prevent other nations from replacing itand this depends
largely on military power

here

. A nation that achieves economic

hegemony over a given sphere must stand ready to stabilize financial flows in that sphere

when these become

disorganized.

Until 1971, the U.S. enjoyed global economic hegemony because it underwrote the Bretton

Woods system of fixed exchange rates. It was hegemonic in the sense defined by

Kindleberger

(1973, 1974)it underwrote the system of fixed exchange rates, and operated as a lender of last resort within that system. After 1971, the U.S. has been a global economic hegemon in the sense defined above, though not in Kindlebergers sense: it has been a
posthegemonic hegemon.

This hegemony has rested on the U.S. economys importance in global trade

, the U.S. dollars role as a

reserve currency and unit of global exchange, and the dominance of U.S. markets and institutions in global finance. This recent period, an era of great instability and recurrent crashes, has seen a step-by-step global deregulation of financial markets and a

relaxation of controls on cross-border capital movements. In this period, global growth has been slower and more unstable; but U.S. military hegemony has, if anything, become stronger. With fewer restrictions on cross-border capital movements, a slower pace

continued U.S. military power, the U.S. has increasingly been a safe harbor
magnet for globally mobile wealth. These changes in the character of U.S. global economic
hegemony are root cause of changes in the character and timing of U.S. cyclical fluctuations.
of global economic growth, and

US Hegemony allows for political stability control over markets

Yaygir 12 (Duygu, Tufts University, Fletcher School of Law and Diplomcy The role of Hegemonic Stability Theory in Today's
Global Political Economy 2012
http://academia.edu/1591123/The_role_of_Hegemonic_Stability_Theory_in_Todays_Global_Political_Economy)

Hegemonic stability theory (HST) seems to remain a strong argument to explain the stabilization
of global political economy (GPE) based on US hegemony until the collapse of Bretton Woods System. However, the
collapse of Bretton Woods system and the new developments in GPE after 1970s seems to bring about the questioning of the validity of HST due
to some new dynamics which has created another form of stability in GPE that HST could not foresee. This
new form of stability differs from the HST with its multiple actors such as emerging markets or regional hegemons and requires the combination of
benevolent and coercive hegemonic rules to be applied. Thus, I am of the opinion that even though the validity of pure HST is questionable
today, it still plays significant but a less strong role in the GPE stabilization. However, considering todays

GPE and its multi-actor

with multi-issues realities, it is reasonable to state that one stabilizer in GPE is necessary but not
sufficient. HST argues that international economic openness and stability is possible only if there is
a single dominant state having both sufficient power and willingness to provide the collective
goods. Thus, it is true to claim that it was not until Bretton Woods era that the US was able to play hegemonic state role. As Kindleberger (1973)

mentioned that the economic chaos between interwar period that led to the Great Depression and the reason of length and depth of it, can be blamed
in part on the lack of a world leader with a dominant economy. While the British was unable to continue its hegemonic role, the US was reluctant to
take the role due to its domestic concerns. 1 Thus, as Kindleberger (1973) stated that the lack of leadership in providing discount facilities, anticyclical lending, or an open market for goods rendered the system unstable after WWI and he noted that the depression might be avoided if the US had
managed to keep open its market, maintain long term capital flowing and provide lending of last resort through discounting in crisis. 2 Frieden
(2006) also underlines that the

inter-war American isolationism left the world economy without the

political engagement of its leading member

Manufacturing
Manufacturing is the foundation of the economy Obama supports
Christian 12 (Jon, covers jobs and the economy for Campus Progress and writes for Tech.li,

Obama: Domestic
Manufacturing Key To Economic Future February 21, 2012
http://campusprogress.org/articles/obama_domestic_manufacturing_key_to_economic_future/)
President Obama

spoke in favor of strengthening the domestic manufacturing economy recently during

we want to build an economy that lasts, that is
strong, that has a strong foundation, that helps families get into the middle class and stay in the
middle class, we've got to do everything we can to strengthen American manufacturing , Obama
said. We've got to make sure we're making it easier for companies like Boeing to create jobs here at home, and
sell our products abroad. We've got to keep on investing in American-made energy, and we've got to keep training
remarks at a Boeing production facility in Everett, Wash. If

American workers. Obama spoke out against tax deductions for businesses that outsource jobs, and suggested establishing a
minimum tax for multinational corporations. He also took the opportunity to again call for tax breaks for American manufacturers
and assistance relocating facilities to communities that have suffered from the loss of factory jobs. The address's message continues
a new theme by the administration promoting domestic manufacturing as a measure to promote economic

recovery, which they are describing as an insourcing initiative. Previously, the White House hosted a round table discussion by
manufacturers that have made a commitment to investing in American labor and resources. Perhaps in part as a result of that
strategy, recent months have brought good news for the fragile economy. The job market has shown signs of improvement, and third
party analyses suggest that domestic manufacturing is growing stronger in 2012. The tide is beginning to turn our way, Obama
said. Over the last 23 months, businesses have created 3.7 million new jobs, and American manufacturers are hiring

for the first time since 1990, and the American auto industry is back, and our economy is getting
stronger.

Manufacturing sector basis for economic prosperity, defense, and

innovation

Duesterber 11 (Thomas J. Duesterberg, Executive Director of the Manufacturing and Society program at the Aspen Institute, educational
and policy studies organization based in Washington, DC, article quoting Steve Rattner, American financier, served as the lead auto advisor in the
United States Treasury Department under Obama. U.S. Manufacturing Has a Key Role in the U. S. Economy of the Future October 19 th, 2011,
http://www.huffingtonpost.com/thomas-j-duesterberg/us-manufacturing-has-a-ke_b_1020608.html)
In a Sunday column in the New York Times, Steve Rattner makes a

case for building our future economic prosperity on the

services sector. Apart from the somewhat perplexing irony of a former auto czar and captain of Wall Street throwing in the towel on manufacturing, his arguments
could contribute to a self-fulfilling prophecy of an admittedly widespread view. There is a more positive economic and political case to be
made that, instead of accepting a slow decline, we put our shoulder to the wheel and build on the apparently
hidden but obvious strengths of U.S. manufacturing. In the first place, growth in manufacturing
production, when calculated on a value-added basis, has kept pace since at least the 1920s with the overall growth rate of the U.S. economy. The U.S.
produces almost the same level of manufactured goods as China, and twice that of Germany and Japan. Although production is below trend at this stage of the cycle, the
sector is expanding at about twice the rate of gross domestic product (GDP). There has been tremendous improvement

in productivity in this sector, at levels well above the rest of the economy. Due to relentless foreign competition, industrial firms have to do this if they want to survive, and also
have little pricing power. The result of these two trends has been steady deflation in the domestic price of manufactured goods, which is down 3 percent between 1995 and 2008
compared to an overall price increase of 33 percent. Productivity improvements and price moderation in this sector are one reason that living standards improve in the United
States. Mr. Rattner would have us rely more on education and health care, two areas where inflation has increased at about twice the rate of the general price level. High
productivity also helps keep wages and benefits in manufacturing higher than the averages. It is hard to deny that U.S. producers have lost market shares both here and abroad
to sophisticated competitors in China, Germany, and others, but we still enjoy trade surpluses in many industries. In 2010, the United States had a trade surplus in aerospace,
construction machinery, semiconductors, mining equipment, industrial machinery, basic chemicals, paper, and engines, turbines and power transmission equipment. If high
corporate taxes did not drive pharmaceutical production offshore, we would have a surplus in this industry as well. Exports of manufactured goods are growing at around 10
percent annually, and our trade in manufactured goods is in balance with all countries with which we have free trade arrangements. As wage levels and other costs in
developing countries rise faster than ours, some production capacity is returning to the United States. A recent BCG study found: "Within the next five years, the U.S. is expected
to experience a manufacturing renaissance as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed
world." Foreign producers, such as Volkswagen, BMW, Honda, and Siemens, are validating this reality by moving production to the United States and exporting from this base;

There is also a strong political case for building on

the strengths of the manufacturing sector. Two-thirds of all research and development is
performed by manufacturing firms, which are the epicenter of patent and innovation activity,
including in such areas as information technology which is so crucial to any productivity
improvements in the services sector. Wages and benefits for production workers are higher among manufacturers, and the typical high levels of
and Caterpillar, NCR, and others are moving production back to the United States.

manufacturing is
critical to national defense. As is becoming increasingly clear, we do not want to rely on foreign competitors for
computers, communication infrastructure, rare earth materials, aerospace equipment, advanced sensors, let alone tanks and ships, if we want to maintain
our traditional position of leadership and security. One searches the historical record in vain for a great power that did not maintain a
solid base in manufacturing and the technology it spawns. Given the likely continued weakness in the U.S. financial services sector and in housing, manufacturing
will remain a source of strength in the current economic cycle, especially with the global terms of trade slowly shifting in its
profits that a Henry Ford and a Steve Jobs captured from economies of scale help to enrich both investors and government coffers. Importantly,

favor. Given the superior productivity performance it has sustained for decades, doing what we can to build the sector is a key to improving our standard of living, even if many
of the lost jobs never return. Unless major services sectors such as health care and education can somehow begin to match the efficiency gains, breakthrough technology
innovations, and price performance of manufacturing, it would be a mistake to base our economic future on them.

Oil Sector
Oil sector supplies more than half of the Nations Fuela decline in
productivity causes economic turmoil

API 2011 (American Petroleum Institute, THE ECONOMIC IMPACTS OF THE OIL AND
NATURAL GAS INDUSTRY ON THE U.S. ECONOMY IN 2009: EMPLOYMENT, LABOR
INCOME, AND VALUE ADDED,
http://www.api.org/policy/americatowork/upload/economicimpacts_of_industry_on_us_eco
nomy_in_2009.pdf )
The oil and natural gas industry is the primary energy source for transportation and the
production of other goods and services. The oil and natural gas industry currently supplies more
than 60% of the nation's total energy demands and more than 99% of the fuel used by
Americans in their cars and trucks. The American Petroleum Institute engaged PwC to quantify
the direct, indirect, and induced impacts of the U.S. oil and natural gas industry on the U.S.
national and state economies in terms of employment, labor income, and value added .2 This report
sets forth our estimates of the oil and gas industry's economic impacts in 2009, the most recent year for which a consistent set of
national and state-level data is available.3 The report's findings show that the oil and natural gas industry

has a widespread economic impact throughout all sectors of the economy and across all 50
states and the District of Columbia. These impacts result directly from the employment and
production activities occurring within the oil and gas industry, indirectly through the industry's
purchases of intermediate inputs and capital goods from a variety of other U.S. industries , and by
the personal purchases of employees and business owners both within the oil and natural gas industry and out of the additional
income in the supply chain to the industry. In describing these economic impacts, this report considers

three separate channels -- the direct impact, the indirect impact, and the induced impact -- that
in aggregate provide a measure of the total economic impact of the oil and natural gas industry .
The direct impact is measured in terms of the jobs, labor income, and value added within the oil
and natural gas industry. The indirect impact is measured in terms of the jobs, labor income,
and value added occurring throughout the supply chain of the oil and natural gas industry. The
induced impact is measured in terms of the jobs, labor income, and value added resulting from
household spending of income earned either directly or indirectly from the oil and natural gas
industry's spending

Oil sector is a crucial gear in Employment, Labor, and incomeall of

which are key to the economy

API 2011 (American Petroleum Institute, THE ECONOMIC IMPACTS OF THE OIL AND
NATURAL GAS INDUSTRY ON THE U.S. ECONOMY IN 2009: EMPLOYMENT, LABOR
INCOME, AND VALUE ADDED,
http://www.api.org/policy/americatowork/upload/economicimpacts_of_industry_on_us_eco
nomy_in_2009.pdf )
As shown in Table 2, the total economic impact of the oil and natural gas industry in terms of
jobs, labor income (including wages and salaries and benefits as well as proprietors' income),
and value added is significant. Employment PwC estimates that at the national level, the oil and
natural gas industry's operations directly and indirectly generated 8.0 million full-time and
part-time jobs in the national economy in 2009. Further, the industry's capital investment
supported an additional 1.2 million jobs in the national economy. Combining both operational
and capital investment impacts, the oil and natural gas industry's total employment impact to
the national economy amounted to 9.2 million full-time and part-time jobs in 2009, accounting

for 5.3 percent of the total employment in the country. Labor Income The associated labor
income (including wages and salaries and benefits, as well as proprietors' income) from the total
jobs directly or indirectly supported by the oil and natural gas industry through its operational
spending and capital investment was estimated to be $534 billion, or 6.0 percent of the national
labor income. Value Added Value added refers to the additional value created at a particular
stage of production. The sum of value added across all industries in a country or region is, by
definition, equivalent to its Gross Domestic Product (GDP). Value added consists of: employee
compensation, proprietors' income, income to capital owners from property, and indirect
business taxes (i.e., those borne by consumers rather than producers). PwC estimates that the
oil and natural gas industry's operations directly or indirectly generated $966 billion of value
added in the U.S. economy in 2009, and its capital The Economic Impacts of the Oil and Natural
Gas Industry 7 investment resulted in an additional $115 billion of value added. Combining both
operational and capital investment impacts, the industry's total value-added impact to the
national economy was $1.1 trillion, accounting for 7.7 percent of U.S. GDP in 2009.

AT: De-development

De-growth Theory Wrong

De-Development theory failsfails to explain recent economics and
doesnt apply to underdeveloped economiesto reject theory of
growth is to reject history and social science
Foster, 11 (John Bellamy Foster, professor of sociology at the University of Oregon and also

editor of Monthly Review, Capitalism and Degrowth: An Impossibility Theorem, January 2011,
Vol. 62, Issue 08, http://monthlyreview.org/2011/01/01/capitalism-and-degrowth-animpossibility-theorem, //nikp)
Degrowth as such is not viewed, even by its proponents, as a stable solution , but one aimed at reducing
the size of the economy to a level of output that can be maintained perpetually at a steady-state. This might mean
shrinking the rich economies by as much as a third from todays levels by a process that would amount to
negative investment (since not only would new net investment cease but also only some, not all, worn-out capital stock would
be replaced). A steady-state economy, in contrast, would carry out replacement investment but would stop short of new net
investment. As Daly defines it, a steady-state economy is an economy with constant stocks of people and artifacts, maintained at
some desired, sufficient levels by low rates of maintenance throughput, that is, by the lowest feasible flows of matter and energy.8
Needless to say, none of this would come easily, given todays capitalist economy. In particular, Latouches work, which can be
viewed as exemplary of the European degrowth project, is beset with contradictions , resulting not from the
concept of degrowth per se, but from his attempt to skirt the question of capitalism. This can be seen in his 2006 article, The Globe
Downshifted, where he argues in convoluted form: For some on the far left, the stock answer is that capitalism is the problem,
leaving us stuck in a rut and powerless to move towards a better society. Is economic contraction compatible with capitalism? This is
a key question, but one that it is important to answer without resort to dogma, if the real obstacles are to be understood. Eco-

compatible capitalism is conceivable in theory, but unrealistic in practice. Capitalism would

require a high level of regulation to bring about the reduction of our ecological footprint. The
market system, dominated by huge multinational corporations, will never set off down the virtuous path of
eco-capitalism of its own accord. Mechanisms for countering power with power, as existed under the Keynes-Fordist
regulations of the Social-Democratic era, are conceivable and desirable. But the class struggle seems to have broken down. The
problem is: capital won. A society based on economic contraction cannot exist under capitalism . But

Getting rid of the capitalists and banning

wage labour, currency and private ownership of the means of production would plunge society
into chaos . It would bring large-scale terrorism .We need to find another way out of
development, economism (a belief in the primacy of economic causes and factors) and growth: one that does not mean
forsaking the social institutions that have been annexed by the economy (currency, markets, even wages) but reframes
capitalism is a deceptively simple word for a long, complex history.

them according to different principles.9 In this seemingly pragmatic, non-dogmatic fashion, Latouche tries to draw a distinction
between the degrowth project and the socialist critique of capitalism by: (1) declaring that eco-compatible capitalism is

conceivable at least in theory; (2) suggesting that Keynesian and so-called Fordist approaches to regulation, associated
with social democracy, couldif still feasibletame capitalism, pushing it down the virtuous path of eco-capitalism; and (3)
insisting that degrowth is not aimed at breaking the dialectic of capital-wage labor or interfering with private ownership of the
means of production. In other writings, Latouche makes it clear that he sees the degrowth project as compatible with

approaching substantive
equality is considered beyond reach.10 What Latouche advocates most explicitly in relation to the
environmental problem is the adoption of what he refers to as reformist measures, whose principles [of
welfare economics] were outlined in the early 20th century by the liberal economist Arthur Cecil Pigou [and] would bring
about a revolution by internalizing the environmental externalities of the capitalist economy .11
continued valorization (i.e., augmentation of capitalist value relations) and that anything

Ironically, this stance is identical with that of neoclassical environmental economicswhile distinguished from the more radical
critique often promoted by ecological economics, where the notion that environmental costs can simply be internalized within the
present-day capitalist economy is sharply attacked.12 The ecological crisis itself is mentioned in the current

degrowth project, as Greek philosopher Takis Fotopoulos has critically observed, in terms of a common problem
that humanity faces because of the degradation of the environment, with no mention at all of
the differentiated class implications of this crisis, i.e., of the fact that the economic and social
implications of the ecological crisis are primarily paid in terms of the destruction of lives and

livelihood of the lower social groupseither in Bangladesh or in New Orleansand much less in terms of
those of the elites and the middle classes.13 Given that it makes the abstract concept of economic growth its target,
rather than the concrete reality of capital accumulation, degrowth theoryin the influential form articulated by Latouche and
othersnaturally faces difficulty confronting todays reality of economic crisis/stagnation, which
has produced unemployment levels and economic devastation greater than at any time since the
1930s. Latouche himself wrote in 2003 that there would be nothing worse than a growth economy without
growth.14 But, faced with a capitalist economy caught in a deep structural crisis, European
degrowth analysts have little to say. The Barcelona Degrowth Declaration simply pronounced: [S]o-called anti-crisis
measures that seek to boost economic growth will worsen inequalities and environmental conditions in the long-run.15 Neither
wishing to advocate growth, nor to break with the institutions of capitalnor, indeed, to align themselves with workers, whose
greatest need at present is employmentleading

degrowth theorists remain strangely silent in the

face of the greatest economic crisis since the Great Depression. To be sure, when faced with
actual degrowth in the Great Recession of 2008-2009 and the need for a transition to
sustainable degrowth, noted ecological economist Joan Martinez-Alier, who has recently taken up the degrowth banner,
offered the palliative of a short-run Green Keynesianism or a Green New Deal. The goal, he said, was to promote economic growth
and contain the rise in unemployment through public investment in green technology and infrastructure. This was viewed as
consistent with the degrowth project, as long as such Green Keynesianism did not become a doctrine of continuous economic
growth.16 Yet how working people were to fit into this largely technological strategy (predicated on ideas of energy efficiency that

degrowth analysts generally reject) was left uncertain. Indeed, rather than dealing with the
unemployment problem directlythrough a radical program that would give people jobs aimed at the creation of
genuine use values in ways compatible with a more sustainable society degrowth theorists prefer to emphasize
shorter working hours, and separate the right to receive remuneration from the fact of being
employed (by means of the promotion of a universal basic income). Such changes are supposed to allow the economic system to
shrink and, at the same time, guarantee income to familiesall the while keeping the underlying structure of capital accumulation
and markets intact. Yet, looked at from a more critical standpoint, it is hard to see the viability of shorter

work hours and basic income guarantees on the scale suggested other than as elements in a
transition to a post-capitalist (indeed socialist) society. As Marx said, the rule for capital is: Accumulate, accumulate!
That is Moses and the prophets!17 To break with capitalisms institutional basis of the law of value, or
to question the structure underpinning the exploitation of labor (both of which would be threatened by a
sharp reduction of working hours and substantial income guarantees) is to raise larger questions of system change
ones that leading degrowth theorists seem unwilling to acknowledge at present . Moreover, a
meaningful approach to the creation of a new society would have to provide not merely income
and leisure, but would also need to address the human need for useful, creative, non-alienated
work. Even more problematic is the attitude of much of current degrowth theory toward
the global South . Degrowth, Latouche writes, must apply to the South as much as to the North if there is
to be any chance to stop Southern societies from rushing up the blind alley of growth economics .
Where there is still time, they should aim not for development but for disentanglementremoving the obstacles that prevent them
from developing differently.Southern countries need to escape their economic and cultural

dependence on the North and rediscover their own historiesinterrupted by colonialism,

development and globalizationto establish distinct indigenous cultural identities .Insisting on
growth in the South, as though it were the only way out of the misery that growth created, can only lead to further westernization.18
Lacking an adequate theory of imperialism, and failing to address the vast chasm of inequality separating the richest from the
poorest nations, Latouche thus reduces the whole immense problem of underdevelopment to one of cultural autonomy and
subjection to a Westernized growth fetish. This can be compared to the much more reasoned response of Herman Daly, who writes,

It is absolutely a waste of time as well as morally backward to preach steady-state

doctrines to underdeveloped countries before the overdeveloped countries have taken
any measure to reduce either their own population growth or the growth of their per-capita
resource consumption. Therefore, the steady-state paradigm must first be applied in the
overdeveloped countries.One of the major forces necessary to push the overdeveloped countries toward asteady-state
paradigm must be Third World outrage at their overconsumption.The starting point in development economics should be the
impossibility theoremthat a U.S.-style high mass consumption economy for a world of 4 billion people is impossible, and even if
by some miracle it could be achieved, it would certainly be short-lived.19 The notion that degrowth as a concept can be

applied in essentially the same way both to the wealthy countries of the center and the poor

countries of the periphery represents a category mistake resulting from the crude imposition of
an abstraction (degrowth) on a context in which it is essentially meaningless , e.g., Haiti, Mali, or even,
in many ways, India. The real problem in the global periphery is overcoming imperial linkages,
transforming the existing mode of production, and creating sustainable-egalitarian productive
possibilities. It is clear that many countries in the South with very low per capita incomes cannot
afford degrowth but could use a kind of sustainable development , directed at real needs such as access to
water, food, health care, education, etc. This requires a radical shift in social structure away from the relations of production of
capitalism/imperialism. It is telling that in Latouches widely circulated articles there is virtually no mention of those countries, such
as Cuba, Venezuela, and Bolivia, where concrete struggles are being waged to shift social priorities from profit to social needs. Cuba,
as the Living Planet Report has indicated, is the only country on Earth with high human development and a sustainable ecological
footprint.20 It is undeniable today that economic growth is the main driver of planetary ecological

degradation. But to pin ones whole analysis on overturning an abstract growth society
is to lose all historical perspective and discard centuries of social science . As valuable
as the degrowth concept is in an ecological sense, it can only take on genuine meaning as part of a critique of
capital accumulation and part of the transition to a sustainable, egalitarian, communal order; one in which the
associated producers govern the metabolic relation between nature and society in the interest of successive generations and the
earth itself (socialism/communism as Marx defined it).21 What is needed is a co-revolutionary movement, to adopt David
Harveys pregnant term, that will bring together the traditional working-class critique of capital, the critique of imperialism, the
critiques of patriarchy and racism, and the critique of ecologically destructive growth (along with their respective mass
movements).22

AT: Environment Impact

De-Dev theorists cannot predict the short-term or long-term effects of
degrowthturn: degrowth policies hurt the environment
van den Bergh, 10 (Jeroen C.J.M. van den Bergh, ICREA research professor Universitat
Autonma de Barcelona, Spain & Professor of Environmental and Resource Economics Vrije
Universiteit, Amsterdam, The Netherlands Postal address: Institute of Environmental Science
and Technology, Environment versus growth A criticism of degrowth and a plea for agrowth, May 21 2010, ICREA, Barcelona, Spain, Ecological Economics, ScienceDirect,
http://www.sciencedirect.com/science/article/pii/S0921800910004209, //nikp)

The rst interpretation of degrowth is striving for negative GDP growth or a reduction in GDP (Gross
Domestic Product).1 This is the most logical interpretation and useful one in the sense that it is likely to be understood as such by
most economists, politicians and the general public. The reason is that it sounds as the opposite of (economic) growth, which in
common use and the media is not a term denoting some vague development pattern but synonymous with GDP growth.

According to this interpretation of degrowth, the current economicnancial crisis associated

with less GDP growth or even a reduction in GDP is then seen by some as good for the
environment (Martnez-Alier et al., 2010). But this conclusion is difcult to draw in general . The
direct, short-term effect of reduced GDP growth may be, for example, fewer CO2 emissions as
aggregate production falls. However, the long term effect is uncertain , as GDP degrowth
may depress investments in cleaner technologies, renewable energy and related research, which
can lead to an increase in future CO2 emissions. Even the short-term effect is uncertain ,
as production during a period of crisis may well shift to cheaper, dirtier techniques . Moreover, as is
illustrated by recent events, both governments and rms are likely to pay less attention to environmental
considerations and policies during a period of crisis. GDP degrowth means a blunt instrument of
environmental policy which reverses the causality between policy and growth as it is normally
understood. Instead of putting good policy rst and then seeing whether degrowth is a consequence, the degrowth strategy is to set
the aim of degrowth rst and then hope that the environment will come out well. However, this cannot guarantee a very

focused, effective and efcient approach to reduce environmental pressure. Worse even,
degrowth might turn out to be dirty . In fact, degrowth can be the result of producing less
efciently, i.e. having less output with more inputs, including more resources, energy, pollution and waste. In other words,
degrowth is not a sufcient condition for reducing environmental pressure . Smaller is not always more
beautiful although I certainly would not go as far as Wilfred Beckerman in saying that Small is stupid in general, or that large
(growth) is necessary for environmental improvement (Beckerman, 1995).2 I fear that the focus of the

degrowth strategy on the scale or size of the economy (measured in GDP) is neglecting the important
role of the composition of both consumption and production, which can considerably change in
response to stringent environmental regulation (and to a lesser extent the more complicated contribution of
technological change). To put it a bit simplistically, we want especially the dirty or dirtiest sectors to degrow if they do not succeed
in adopting sufciently clean technologies or realizing a substitution away from dirty inputs. Simultaneously, cleaner

production, such as of electricity from renewable energy, may grow, which in turn would add to
GDP growth. This illustrates that the relation between environmental quality and
economic growth is more complex than degrowth (as well as growth) advocates suggest. Of course, no one
can hope to predict and plan for all this differential or selective growth and degrowth of dirty and cleaner activities in the economy.
A subtle type of regulation and information provision will be needed, which surely will have to make use of some type of price
regulation. My general proposal later will be to implement specic environmental policies along with adequate complementary
policies and strategies, as discussed in detail in Section 6. Whether the resulting policy package will then give rise to GDP growth or
degrowth should be irrelevant, as GDP (per capita) is not a good proxy of social welfare (discussed in Section 3). I agree though with
Hueting (2010), who argues that effective environmental regulation is likely to result in GDP degrowth, or at least during an initial
period of transition, simply because a large part of economic growth is realized in sectors which generate much pollution. Especially
the reduction of CO2 and other greenhouse gas emissions will turn out to be difcult because of
the core role played by fossil fuels in modern economies. Serious climate policy may therefore hamper growth

(though to a lesser extent well-being see van den Bergh, 2010b, Section 5.4). But we

should not reverse the causality

as in the GDP degrowth strategy because then it is unclear whether improved environmental
quality will actually materialize or whether it will be realized against reasonable (or minimal) social costs. Another
argument against a GDP degrowth strategy is that it submits to the growth paradigm in the sense that it
continues giving much importance to the notion and indicator of GDP.

Reducing consumption to remedy the environment through de-dev is

a misconception that leads to more consumption
van den Bergh, 10 (Jeroen C.J.M. van den Bergh, ICREA research professor Universitat
Autonma de Barcelona, Spain & Professor of Environmental and Resource Economics Vrije
Universiteit, Amsterdam, The Netherlands Postal address: Institute of Environmental Science
and Technology, Environment versus growth A criticism of degrowth and a plea for agrowth, May 21 2010, ICREA, Barcelona, Spain, Ecological Economics, ScienceDirect,
http://www.sciencedirect.com/science/article/pii/S0921800910004209, //nikp)
The second interpretation of degrowth

means striving for a reduction in the amount of consumption ,

a strategy is then hoped to translate into less resource use and less pollution
(Princen, 2005; Alcott, 2008). This is, however, not sure to be an effective approach to environmental
regulation, while it is certain to be a very inefcient one. Equally problematic is that the measurement of
consumption degrowth is ambiguous. One can focus on physical/quantity or monetary/value
indicators, but neither are guaranteed to be a good proxy of environmental impact . A simplistic
however measured. Such

indicator like the total weight (kilogrammes) of consumption may seem an adequate approach at rst sight, but it would
immediately exclude the consumption of services, even though these may indirectly cause much environmental pressure. In view of
such measurement-indicator problems, a consumption degrowth strategy runs a serious risk of remaining

a vague, conceptual approach which cannot be empirically implemented in any unambiguous

way. As a result, it is entirely unclear which individual limit on consumption for each consumer
would be reasonable and necessary for reaching environmental sustainability . Supporters of this
strategy have the hope that frugality (voluntary restraint or simplicity) will drive consumption down. As identied in the literature
on environmental psychology, some people are indeed able to apply voluntary restrictions to their

consumption behavior which are environmentally motivated (Gsottbauer and van den Bergh, forthcoming).
The question is of course how environmentally effective this is, and in particular whether one
can safely assume this to work for a signicant proportion of all consumers. Only looking at shopping
malls, television, roads and airports should make one very skeptical about this. One can anyway wonder whether it is
realistic or even fair to ask from the median consumer that s/he gives up the luxuries of modern
life, to in some way go back in time. It is unlikely that hunter-gatherers or Henri David Thoreau (Walden) can serve as a role
model for them. The other extreme is (equal) individual quota on consumption, perhaps for a range
of heavily environmentally damaging goods and services (notably gasoline), to realize consumption degrowth in
an equitable manner. However, this resembles too much a communist society which will undoubtedly be
difcult to obtain political support for . A problem with focusing directly on consumption degrowth
is that it may activate a rebound mechanism. Especially a voluntary reduction of consumption of
certain types of goods and services may well lead to an increase in other types of
consumption since disposable income will remain the same . Alternatively, it may lead to
savings, which in turn implies more money being available for others to borrow and spend (van den
Bergh, 2011). Generally, people are boundedly rational and lack the necessary information to make
decisions that will effectively reduce environmental pressure. Against this background, I think there is much
to say in favor of the traditional policy perspective that product and service prices need to reect
much better environmental and climate externalities, which will then force people to change
their behavior as well as control or minimize rebound effects (van den Bergh, 2011). Without such pricing of
environmental externalities associated with all (indirect) production and consumption, it would be virtually
impossible for consumers to know or judge which consumption goods and services are relatively
much or little polluting. This illustrates the essential informative role of environmental regulation

through prices (taxes, levies or tradable permits). The focus on the size of total consumption underrates the
importance of shifting from dirty to cleaner consumption. Stringent environmental (price) regulation will considerably alter the
composition of consumption. The relevance of changing the composition of both production and consumption was translated into
the notion of selective growth, popular in the Netherlands during the 1970s after the Club of Rome's publication on the limits to
growth. In line with this, a logical and more desirable aim than general (consumption) degrowth would be selective degrowth. Of
course, in the process the scale of consumption is likely to be affected as well. But whether consumption degrowth will be the
outcome should not really matter and certainly not be set as an ex ante goal, also because of the before mentioned measurement
problem associated with it. Thinking about ( over)consumption , nevertheless, suggests one problem that

requires policy action . This concerns commercial advertisement, which does not always contribute to welfare in fact
much of it really represents a social cost (Norton et al., 1998). Regulation of such advertisement is likely to affect welfare in a
positive way and possibly can alter the composition of consumption in an environmentally favorable way, even though one cannot
expect too much environmental effectiveness from such an approach (in isolation). Nevertheless, this deserves more study.
Unfortunately, the social cost of advertising is a neglected topic in the social and environmental sciences (an exception is Becker and
Murphy, 1993, who however make the odd assumption that preferences are xed).

Transition Fails
Radical transition will lead to chaos and instabilitytheir authors are
alarmists and normative motivated by ideology rather than being
analytical and realisticinevitably leads to ineffective politics
van den Bergh, 10 (Jeroen C.J.M. van den Bergh, ICREA research professor Universitat
Autonma de Barcelona, Spain & Professor of Environmental and Resource Economics Vrije
Universiteit, Amsterdam, The Netherlands Postal address: Institute of Environmental Science
and Technology, Environment versus growth A criticism of degrowth and a plea for agrowth, May 21 2010, ICREA, Barcelona, Spain, Ecological Economics, ScienceDirect,
http://www.sciencedirect.com/science/article/pii/S0921800910004209, //nikp)
Perhaps for the majority

of degrowth proponents the notion of degrowth denotes a radical change of

economy. This may involve changes in values, ethics, preferences,
nancial systems, markets (versus informal exchange), work and labor, the role of money, or even
prot-making and ownership (Latouche, 2009; Schneider et al., 2010). Such an approach comprises degrowth notions 2
and 3, but it is broader. Fournier (2008) has called it escaping from the [capitalist] economy. The main problem I
see here that this is such a grand, imprecise idea which lacks a good, thorough analysis that it will be
impossible to obtain political support for it in a democratic system . More importantly, it is void of a
good view on systemic solutions and instrumentation, making it unclear how to upscale radical
changes in lifestyles and grassroots initiatives by small subsets of the population (niches) to
society as a whole. Alternative lifestyles, i.e. outside the cultural norm, have always existed but have never been
adopted by the large majority of people. So why would this now suddenly be different? This does, of course, not mean
such lifestyles need not exist or do not deserve respect. They may inuence slow change in dominant lifestyles,
but cannot be expected to be copied by the masses. Writings on this issue tend to be
(or many radical changes in) the

normative and idealistic rather than analytical and realistic . They seem to be
motivated more by political ideology about justice and equity than about solving
urgent and threatening environmental problems (an ecological imperative). As a result,
they do not necessarily offer an effective approach to combat environmental problems . One can
certainly be positive about the underlying humanistic ideals of equality, solidarity, citizenship, locality and good life. However, a
drastic change in the economy upfront seems an overly risky experiment and a diffuse,
undirected strategy that is not sure to meet the desired environmental aims. Moreover, it may
well result in unintended social and economic chaos and instability . The main historical, largescale experiments aimed at moving away from market capitalism which we can learn from, namely central planning by
communist states as in the former USSR, Eastern Europe and China, certainly do not offer a good record in terms of
clean production and environmental regulation quite the opposite. Here, a lack of market mechanisms and other
incentives seems to have given rise to excessive waste and inefciency, also in relation to environmentally relevant categories of
inputs and outputs. Thinking about radical changes should moreover incorporate received insights about human behavior and its
diversity as found in modern psychology and behavioral economics. These are already slowly changing mainstream economics and
associated ideas about public policy (Gsottbauer and van den Bergh, forthcoming). Given the urgency of environmental and notably
climate change problems it makes sense to think carefully about the effectiveness of strategies in the short and medium term, which
should involve taking into account behavioral features and limits of human individuals and organizations. Striving for radical

degrowth seems risky in this sense as it does not well integrate received insights about human
behavior. Instead, a less risky and more effective strategy is adding new institutions to our economies to begin with an effective
international climate agreement. What we need most of all is a hard environmental constraint on our economy (complemented by
price regulation and possibly other types of regulation, like of commercial advertising and taxing status goods with serious
environmental repercussions) and then let consumers, producers and investors adapt to it. Possibly, this will go along with
fundamental, radical changes in our economy and institutions, but it does not seem necessary to

require these and have a blueprint of them upfront.

Growth Bad

Growth Unsustainable

Generic Unsustainable
Current capitalist system failseconomies are unstableIceland
proves

Cato 09 (Molly Scott Cato, PhD from University of Wales, green economist and member of
Green Party of England and Wales, Professor Strategy and Sustainability at the University of
Roehampton and Convenor of Roehampton Business Schools Responsible Capitalism research
center, An Object Lesson, General Science Full Text, Vol. 39, Issue 2, Ebsco Host, March
2009)
The world has watched the vertiginous collapse of the Icelandic economy in recent months with a
mixture of fascination and horror. The Victorians popularised the concept of the 'object lesson', when an item, often from nature,
was brought into the classroom and used as a didactic illustration of a general moral lesson. Iceland is providing an object

lesson in what is wrong with the organisation of the global economy . Its first mistake was to
focus on finance and ignore resources of real value. With a population barely larger than Bristol's and few
resources other than hot water and fish, it could not sustain the sorts of huge investment deals its 'Viking raider' entrepreneurs were
engaging in. Overstretched, they brought the banks down with them; then the currency; then the

whole economy. But there is nothing unusual about this strategy: 95 per cent of the transactions
taking place in the global economy have no contact with real goods . We have an economy that
feels it can cut loose of the planet and generate profits through financial engineering . The problem is
that this disembedding of economy from environment means there is no longer any awareness of
how much the Earth can sustain. Its resources are depleted, its energy drained. We are killing
our own support system. The dislocation between economic activity and natural systems also
has consequences for ourselves. We have created an unstable and ungrounded economy :
we become similarly unstable and ungrounded if we spend all our lives at work-stations rather than engaged in creative and
collaborative work. When our shoes and even our food are produced on the other sides of the globe, it is all-too-easy to forget that all
are resources are provided by nature. Iceland is also demonstrating the insecurity bequeathed by

globalisation. An immediate consequence of the crisis was a clearing of supermarket shelves in a

country that has low-quality land and a poor climate, hence most fresh food arrives in tins. In spite of our lush
landscapes, the UK is also running a huge food deficit--the same size as China's, according to the UN's Food and Agriculture
Organization--and as the value of sterling declines, the cost of imported food rises. This global supermarket approach is also
damaging the human spirit, depriving us of local meaning and real nourishment. The lessons Iceland has to show

us

in terms of social cohesion are perhaps the most disturbing , and also the most promising. Following the
implosion of the banks there were numerous violent protests in Reykjavik, and calls for the resignation of prime
minister Geir Haarde led to the collapse of his government in January. In November, Iceland had signed a deal with
the IMF, which will lend 10 billion to support the economy, but only on condition that it introduces the sorts of policies of cutting
expenditure and squeezing living standards that poor countries of the south have been subject to. This has led to disillusionment
with the conventional economic model and support for the green-left party by around a third of the electorate. What can we learn
from the

Iceland ic object lesson? It demonstrates the unsustainable nature of the

globalised capitalist system

that has come to dominate provisioning and trade over the past 40 years. The most

an economy is worth
what it has in terms of resources: its people and its land. Losing sight of this basic fact has
created overinflated currencies and excessive asset prices; the other side of the coin has been the devaluing of
the resources that really matter: people and planet. Creating green jobs is all very well, but until we tackle the economic
system's underlying destructive logic, sustainability will always be out of reach .
important lesson is to cut your coat according to your cloth. Once you strip away the financial fluff,

Spillover
Multiple factors make collapse inevitable, but we only have to win one
Interconnectedness means any crisis goes global
Taylor 8 [Graeme Taylor is a social activist committed to constructive global transformation
and the coordinator of BEST Futures, a project supporting sustainable solutions through
researching how societies change and evolve, Evolution's Edge: The Coming Collapse and
Transformation of Our World, Pomegranate Press, 2008, ISBN: 9781550923810, EBrary, pg.
108-9]

It is easier for societies to manage Problems that are temporary and/or local in nature than
problems that are sustained and/ or generalized. For example, it is easier for a society to manage a single failed
harvest than long-term climate change, a work stoppage in one factory than a national strike, a border dispute than all-out warfare.

The work of Jack Goldstone, a sociologist at George Mason University, indicates that societies
are more likely to break down when they face multiple converging stresses. He wrote,"Massive
state breakdown is likely to occur only when there are simultaneously high levels of distress and
conflict at several levels of society _ in the state, among elites, and in the populace? While converging stresses can result
from disparate developments {e.g. a harvest failure occurring at the same time as invasion, they are often caused by cascading crises
{e.g. a harvest failure causes famine which then triggers a rebellion). As crises interact with each the problems

multiply and become more difficult to manage. The large number of interacting problems facing
humanity in the coming decades increases the probability of major crises. Enormous threats are
posed by climate change, energy shortages, water scarcity, food shortages, loss of biodiversity,
growing economic inequality. increasing global financial instability and conflicts over scarce
resources. Other growing threats also exist, such as pandemic; and the proliferation of nuclear weapons? While any of
these issues will be extremely difficult to manage by itself in combination they will be
unmanageable. For example, until recently UN food estimates have assumed that both the weather and energy prices will
remain relatively stable for the foreseeable Future. But what will happen to agricultural production if the costs of irrigation,
fertilizers and transportation continue to rise clue to declining oil supplies? \Vl1 at will happen if this problem is

compounded by other Factors such as climate change? And what will be the political consequences in China,
India and other countries ii' these interacting crises produce a deadly combination: a global depression, inflation, increasing food
shortages and growing unemployment? Scenarios such as these are the recipe For the type of perfect storm

that could cause the catastrophic collapse of the world system.`9' Global crises could start almost
anywhere. Since societal systems have complex and chaotic dynamics, it is not possible to make
precise predictions about the Future. Nevertheless, it is possible to define system parameters - the operating conditions
and resources that 11 society must have to survive. The biological law of the Minimum (Liebig's Law] states that the population of
any species is limited by the necessity [water food, suitable climate] in least supply. This means that it will only take a shortage of
one irreplaceable global resource to trigger a global crisis. Although we are not yet in a position to predict which

resource will run out when. we do know that resource shortages are inevitable because the
industrial system requires constantly increasing quantities of energy; water, metals, fiber, grains
and other critical resources in order to function. We also know that the availability of many
resources is declining due to overexploitation, pollution and climate change. Many experts
believe that oil production will peak and begin to decline sometime between 2008 and 2015 .
While the Hrs: 150 years of industrialization were powered by wood and coal, the rapid expansion of the industrial system alter 19(1)
closely corresponds with the rapid expansion of oil production. Since oil is the most important source of energy on the planet today,
when production begins to decline, the global economy is likely to go into a severe depression. This chart indicates how vulnerable
our industrial civilization is to resource shortages. we could create similar charts to show how rapidly other essential resources such
as groundwater, topsoil, wood, fish, natural gas, lead, zinc or copper are being depleted, and how rapidly the planets air, earth and
water are being polluted. In terms of the long existence of humans on earth, the industrial Age is only a brief passing phenomena.
Non-renewable fossil fuels made mechanization possible. Mechanization has allowed our species to expand and consume both
renewable and non-renewable resources at an unsustainable rate. Now the resources are almost running out,

major ecosystems are failing, and industrial civilization is about to collapse.

Science/Models
Economic collapse is inevitable with exponential growth credible
computer models prove.
MacKenzie 12 (Deobra, consultant for the New Scientist, BBC Correspondant Boom And
Doom: Revisiting Prophecies Of Collapse. Full Date: 1/10/12.
http://www.countercurrents.org/mackenzie100112.htm)

At the beginning of the 1970s, a group of young scientists set out to explore our future. Their findings shook a generation and may be even more
relevant than ever today. The question the group set out to answer was: what

would happen if the worlds population and

industry continued to grow rapidly? Could growth continue indefinitely or would we start to hit
limits at some point? In those days, few believed that there were any limits to growth some
economists still dont. Even those who accepted that on a finite planet there must be some limits
usually assumed that growth would merely level off as we approached them. These notions,
however, were based on little more than speculation and ideology . The young scientists tried to take a
more rigorous approach: using a computer model to explore possible futures. What was shocking was that
their simulations, far from showing growth continuing forever, or even levelling out, suggested
that it was most likely that boom would be followed by bust: a sharp decline in industrial output, food production and
population. In other words, the collapse of global civilisation. These explosive conclusions were published in 1972 in a slim paperback called The Limits
to Growth. It became a bestseller and provoked a furious backlash that has obscured what it actually said. For instance, it is widely believed that
Limits predicted collapse by 2000, yet in fact it made no such claim. So what did it say? And 40 years on, how do its projections compare with reality so
far? The first thing you might ask is, why look back at a model devised in the days when computers were bigger than your fridge but less powerful than
your phone? Surely we now have far more advanced models? In fact, in many ways we have yet to improve on World3, the relatively simple model on
which Limits was based. When you think of the change in both scientific and computational capabilities since 1972 ,

it is astounding there
has been so little effort to improve upon their work, says Yaneer Bar-Yam, head of the New England Complex Systems
Institute in Cambridge, Massachusetts. It hasnt happened in part because of the storm of controversy the book provoked. Researchers lost their
appetite for global modelling, says Robert Hoffman of company Whatlf Technologies in Ottawa, Canada, which models resources for companies and
governments. Now, with peak oil, climate change and the failure of conventional economics, there is a renewed interest. The other problem is that as
models get bigger, it becomes harder to see why they produce certain outcomes and whether they are too sensitive to particular inputs, especially with
complex systems. Thomas Homer-Dixon of the University of Waterloo in Ontario, Canada, who studies global systems and has used WorId3, thinks it
may have been the best possible compromise between over-simplification and unmanageable complexity. But Hoffman and Bar-Yams groups are now
trying to do better. World3

was developed at the Massachusetts Institute of Technology. The team took what was
known about the global population, industry and resources from 1900 to 1972 and used it to
develop a set of equations describing how these parameters affected each other. Based on
various adjustable assumptions, such as the amount of non-renewable resources, the model
projected what would happen over the next century. The team compares their work to exploring what happens to a ball

thrown upwards. World3 was meant to reveal the general behaviour that results in the case of a ball, going up and then falling down not to make
precise predictions, such as exactly how high the ball would go, or where and when it would fall. None of these computer outputs is a prediction, the
book warned repeatedly. Assuming that business continued as usual, World3

projected that population and industry

would grow exponentially at first. Eventually, however, growth would begin to slow and would
soon stop altogether as resources grew scarce, pollution soared and food became limited. The
Limits to Growth said that the human ecological footprint cannot continue to grow indefinitely,
because planet Earth is physically limited, says Jrgen Randers of the Norwegian School of Management in Oslo, one of the
books original authors. Whats more, instead of stabilising at the peak levels, or oscillating around them, in almost all model runs population and
industry go into a sharp decline once they peak. If

present growth trends in world population, industrialisation,

pollution, food production and resource depletion continue unchanged, the limits to growth on
this planet will be reached sometime within the next 100 years. The most probable result will be
a sudden and rather uncontrollable decline in both population and industrial capacity, the book
warned. This was unexpected and shocking. Why should the worlds economy collapse rather than stabilise ? In
World3, it happened because of the complex feedbacks between different global subsystems such as
industry, health and agriculture. More industrial output meant more money to spend on
agriculture and healthcare, but also more pollution, which could damage health and food
production. And most importantly, says Randers, in the real world there are delays before limits are
understood, institutions act or remedies take effect. These delayed responses were programmed into World3. The model
crashed because its hypothetical people did not respond to the mounting problems before underlying support systems, such as farmland and

ecosystems, had been damaged. Instead, they carried on consuming and polluting past the point the model world could sustain. The result was what
economists call a bubble and Limits called overshoot. The impact of these response delays was the fundamental scientific message of the study, says
Randers. Critics, and even fans of the study, he says, didnt get this point. The other message missed was not that humanity was doomed, but that
catastrophe could be averted. In model runs where growth of population and industry were constrained, growth did level out rather than collapse the
stabilised scenario (see graph, right inset). Yet few saw it this way. Instead, the book came under fire from all sides. Scientists didnt like Limits because
the authors, anxious to publicise their findings, put it out before it was peer reviewed. The political right rejected its warning about the dangers of
growth. The left rejected it for betraying the aspirations of workers. The Catholic church rejected its plea for birth control. Critical points The most
strident criticisms came from economists, who claimed Limits underestimated the power of the technological fixes humans would surely invent. As
resources ran low, for instance, we would discover more or develop alternatives. Yet the

Limits team had tested this. In some runs, they

gave World3 unlimited, non-polluting nuclear energy which allowed extensive substitution
and recycling of limited materials and a doubling in the reserves of nonrenewables that could
be economically exploited. All the same, the population crashed when industrial pollution
soared. Then fourfold pollution reductions were added as well: this time, the crash came when
there was no more farmland. Adding in higher farm yields and better birth control helped in this
case. But then soil erosion and pollution struck, driven by the continuing rise of industry.
Whatever the researchers did to eke out resources or stave off pollution, exponential growth was
simply prolonged, until it eventually swamped the remedies. Only when the growth of
population and industry were constrained, and all the technological fixes applied,
did it stabilise in relative prosperity. The crucial point is that overshoot and collapse
usually happened sooner or later in World3 even if very optimistic assumptions were made
about, say, oil reserves. The general behaviour of overshoot and collapse persists, even when large changes to numerous parameters are
made, says Graham Turner of the CSIRO Ecosystem Sciences lab in Crace, Australia. This did not convince those who thought technology could fix
every problem. And with so much criticism, the idea took hold that Limits had been disproved. That mantra has been repeated so often that it became
the received wisdom, says Ugo Bardi of the University of Florence in Italy, author of a recent book about Limits. The common perception is that the
work was discredited scientifically. I heard it again at a meeting last April, says Homer-Dixon. It wasnt. It wasnt just confusion. Misunderstanding
was enhanced by a media campaign very similar to the one that has been recently directed against climate science, says Bardi. One of the most
common myths is that Limits predicted collapse by 2000. Yet as a brief glance at the standard run shows, it didnt (see graph, right). The book does
mention a 1970 estimate by the US Bureau of Mines that the world had 31 years of oil left. The bureau calculated this by dividing known reserves by the
current rate of consumption. Rates of consumption, however, were increasing exponentially, so Limits pointed out that in fact oil had only 20 years left
if nothing changed. But this calculation was made to illustrate the effects of exponential growth, not to predict that there were only 20 years of oil left.
When Matthew Simmons, a leading oil-industry banker, finally read Limits in the 1990s, he was surprised to find none of the false predictions he had
heard about. On the contrary, he concluded, population and energy growth largely matched the basic simulation. He felt Limits got so much attention,
then lost it, partly because the oil shock of 1973 focused minds on resource shortages that were then largely resolved. There have been other recent reappraisals of the book. In 2008, for instance, Turner did a detailed statistical analysis of how real growth compares to the scenarios in Limits. He

concluded that reality so far closely matches the standard run of World3 . Does that mean we face
industrial collapse and widespread death? Not necessarily. A glance at Turners curves shows we havent yet reached the stage of the standard run, later
this century, when such events are predicted. In the model, overshoot

and collapse are preceded by exponential

growth. Exponential growth starts out looking just like linear growth, says Bar-Yam: only later does the exponential curve start heading skywards.
After only 40 years, we cant yet say whether growth is linear or exponential. We already know
the future will be different from the standard run in one respect, says Bar-Yam. Although the actual world
population up to 2000 has been similar, in the scenario the rate of population growth increases with time one of the exponential drivers of collapse.
Although Limits took account of the fact that birth

rates fall as prosperity rises, in reality they have fallen much faster than was
expected when the book was written. It is reasonable to be concerned about resource limitations in fifty years, Bar-Yam says,
but the population is not even close to growing [the way Limits projected in 1972]. The book itself may be partly responsible. Bar-Yam thinks some of
the efforts in the 1970s to cut population growth were at least partly due to Limits. If it helped do that, it bought us more time, and its a very
important work in the history of humanity, he says. Yet

World3 still suggests well hit the buffers eventually. The

original Limits team put out an updated study using World3 in 2005, which included fasterfalling birth rates. Except in the stabilising scenario, World3 still collapsed. Otherwise, the team didnt
analyse the correspondence between the real world and their 1972 scenarios in detail noting only that they generally match. Does this
correspondence with history prove our model was true? No, of course not, they wrote. But it does indicate that assumptions and conclusions still
warrant consideration today. This remains the case. Forty

years on from its publication, it is still not clear whether Limits was
been proved wrong either. And while the model was too pessimistic about birth and death rates, it was too optimistic
about the future impact of pollution. We now know that overshoot the delayed response to problems that makes the
effects so much worse will eventually be especially catastrophic for climate change, because
the full effects of greenhouse gases will not be apparent for centuries.
right, but it hasnt

Laws of physics make collapse inevitable

Mills 9 (Julianne H. Mills, Julianne H. Mills received her PhD in Evolution, Ecology, and
Organismal Biology from The Ohio State University, 2009, ECONOMIC PROSPERITY,
STRONG SUSTAINABILITY, AND GLOBAL BIODIVERSITY CONSERVATION: TESTING THE

ENVIRONMENTAL KUZNETS CURVE HYPOTHESIS, http://etd.ohiolink.edu/sendpdf.cgi/Mills%20Julianne%20H.pdf?osu1243432252)

Unfortunately, technology can only achieve so much before it runs up against the restrictions of
physics. Neoclassical economists have been quick to point out that we have not yet encountered
any such limits, heralding proponents of limits-to-growth as doomsayers (Beckerman 1992). For such
economists, the fact that we are in ecological o vershoot merely proves the astuteness of economic maxims: substitution and
technology have thus far managed to sustain our existence, despite overreaching of supposed biocapacity. But, it should be plain to
anyone that not yet having encountered something does not preclude its existence. What such weak formulations of

sustainability neglect is that we are subsidizing current growth at the expense of future
regenerative ability. Absolute, binding limits do exist. The first law of thermodynamics dictates a
finite amount of energy and matter on Earth, while the second law ensures that technology (or any
other process) will never achieve perfect efficiency (see Czech 2008 for a more thorough explanation of these laws as
they apply to ecology and conservation). A different, stronger brand of sustainability is therefore in order,
one which acknowledges these inherent physical limitations to growth and seeks to maintain the
stock of natural capital at a constant level, operating within the Earths regenerative capacity,
rather than above it (Costanza & Daly 1992; Rees 2002). This strong sustainability is a founding principle of ecological
economics, the discipline which forms the basis for this study, and, arguably, must form the cornerstone of any endeavor which
seeks to abate the current biodiversity crisis and address the underlying socioeconomic environment, both of which will be of vital
importance in paving the way for global sustainability (Armsworth & Roughgarden 2001).

Collapse is inevitable computer models

NewScientist 08. [Prophesy of economic collapse 'coming true']

http://www.newscientist.com/article/dn16058-prophesy-of-economic-collapse-comingtrue.html
Things may seem bad now - with fears of a world recession looming - but they could be set to get much worse. A real-world analysis
of a controversial prediction made 30 years ago concludes that economic growth cannot be sustained and we are

on track for serious economic collapse this century. In 1972, the seminal book Limits to Growth by a group
called the Club of Rome claimed that exponential growth would eventually lead to economic and
environmental collapse. The group used computer models that assessed the interaction of rising
populations, pollution, industrial production, resource consumption and food production . Most
economists rubbished the book and its recommendations have been ignored by governments, although a growing band of experts
today continues to argue that we need to reshape our economy to become more sustainable. Now Graham Turner at
theCommonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia has compared the book's predictions with
data from the intervening years.

AT: Technology
Tech cant solve fast enough

Trainer 11[Ted Trainer, Lecturer in Sociology at the University of New South Wales The
radical implications of a zero growth economy, real-world economics review, issue no. 57, 6
September 2011, pp. 71-82, http://www.paecon.net/PAEReview/issue57/Trainer57.pdf]
We come now to the crucial assumption most people make, i.e., that there is no need to even think about questioning growth, let
alone reducing consumption or economic output, let alone cutting GDP by a factor of 5 to 10 . The generally assumed view

is, We will all be able to go on buying lots of goods, living in gigantic houses, driving long
distances, going away for holidays, jetting around the world, having elaborate wardrobes etc.,
and increasing our consumption of those things every year because our wizard technologists
will find ways of producing goods and running cars etc. without causing significant problems.
Indeed the technologies already exist; its just that our dull-witted politicians have failed to
implement them. However, the overshoot is far too great for any plausible technical advances
to be able to reduce the problems to tolerable proportions. Perhaps the best known "technical fix" optimist,
Amory Lovins, claims that we could at least double global output while halving the resource and environmental impacts, i.e., we
could achieve a "Factor Four" reduction. (Von Weisacher and Lovins, 1997. More recently a Factor Five reduction is argued.) But
this would be nowhere near enough to solve the problems. Let us assume that present global resource and

It has been explained that if we in rich countries average 3% growth,

and 9 billion rose to the living standards we would then have by 2050, total world output would
be almost 20 times as great as it is today . It is highly implausible that technical advance
ecological impacts must be halved.

will make it possible to multiply total world economic output by 20

i.e., to enable a Factor 40 reduction?

while halving impacts,

AT: Environment

Kills EnvironmentExtinction
Growth kills the environment- results in total extinction

Barry 12 (Glenn, Ph.D. in Land Resources from the University of Wisconsin-Madison,

8/18/2012, EARTH MEANDERS: This I Know to Be Ecological Truth,
http://www.ecoearth.info/blog/2012/08/earth_meanders_this_i_know_to.asp#more)
Earth is an ancient organism, alive for 3.5 billion years. Only a few hundred years ago the disease of
industrial capitalist growth arose, and is killing her by destroying her ecosystems . The current
dominant economic paradigm mistakes ecosystem habitats which are necessary for life for
disposable resources to be logged, mined, and burnt. Ancient, naturally evolved ecosystems are being stripped of
life, largely for growth in throw-away consumer junk. As a result, water, soil, climate, and food systems are failing. Human history
can be summarized as the rich screwing the poor, stealing their work's surplus, while trashing ecosystems, at the point of a gun. For
millennium, as human civilization developed, destroying ecosystems has been embraced as normal

and desirable, particularly for agriculture. Over-population going from 1.5 to 7 billion
inequitable super-consumers in 125 years has surpassed planetary ecological boundaries. It
has been routinely claimed that growth and liquidating natural habitat is progress and
advancement, when in fact ecosystem loss is ecocide, and is killing us all . Ecosystem collapse is already
here for one billion people globally without enough food, another billion lacking water, two billion living on less than $2 per day, and
those subsisting on industrially over-developed and climate changed lands. Austerity in over-developed countries is

in fact largely caused by ecosystem collapse, as jobs and easy growth from once-off harvesting of
ecosystems ends. Without intact, healthy ecosystems, this is all our futures. Earth without its
ecosystems and biosphere is no longer habitable. Earth's naturally evolved ecosystems required
for a livable and abundant life are being destroyed by exponential, unsustainable and
inequitable growth in population, consumption and industry. This exploitative relationship towards Earth, other humans,
and all life is now being perfected and fully implemented globally. The sum of this "free-market" growth machine's
destructive impact upon climate and ecosystems is crashing our one shared biosphere. When the
ecosystems are gone, you can't eat money, and everything dies.

Net-Negative Effect
Growth net destroys the environment

Barker 05 (John, biologist and correspondent for Gaia Watch, Is Economic Growth good for
the Environment? An approach to this question using the Environmental Kuznets Curve
Hypothesis, http://www.population-growth-migration.info/essays/economyk.htm)
Ayers (1995) went further than Arrow and colleagues in being skeptical over the general proposition that economic growth is good
for the environment. In fact he concluded the proposition was false and pernicious nonsense. Remember that Arrow et al had
noted that the relationship had not been found for resource depletion. Now Ayres notes that economic growth is

historically closely correlated with increased consumption of energy and other resources . He also
notes that most of the environmental problems of regional and global concern are directly
traceable to the unsustainable use of fossil fuels and/or other materials, such as toxic heavy
metals and chlorinated chemicals. Further he notes a general consequence of the basic physical law
of conservation of mass every material extracted from the environment is a potential waste
Except for materials used in construction, raw materials (and fuels) usually become wastes or
pollutants within months or a few years at most.

Their authors over simplify- economic growth net bad for

environment

Barker 05 (John, biologist and correspondent for Gaia Watch, Is Economic Growth good for
the Environment? An approach to this question using the Environmental Kuznets Curve
Hypothesis, http://www.population-growth-migration.info/essays/economyk.htm)
O'Neill et al (1996) are equally sceptical. They consider that the

empirical relationship that had been discussed by Arrow

environmental quality and GDP adopts a trivial definition of environmental
quality as it is only based on a subset of pollutants in a limited number of places. This is inadequate to encompass
the complex interactions between economic growth and the environment on which that growth
depends. Such a simplification of the total environmental situation ignores the importance of
"basic ecosystem services: cleaning the water, purifying the air, decomposing wastes,
maintaining CO2 balance, permitting recovery from natural disturbances, filtering ultraviolet
radiation, and providing sources of new medicines. In fact, discussions of economic growth often
ASSUME stable, resilient ecosystems that will continue to provide these life-support services.
The authors go on to assert that even if wealthy nations are able to reduce pollution, economic growth
will impose increasing stress on ecosystems. And total impact can be expected to increase as a
function of GDP, considering cumulative depletion of resources, land use changes with implications for water quality and
(ibid), between

biodiversity, and rates of exploitation that exceed rates of replacement.

Emissions/Fossil Fuels
Growth hurts the environment- no incentive to reduce emissions

Cadman 10 (Brie, biochemist and has a MA in Public Health, Is a bad economy good for the
environment? http://www.divinecaroline.com/life-etc/culture-causes/bad-economy-goodenvironment)
One of the easiest ways for a country to reduce its greenhouse gas emissions and comply with
levels set by the Kyoto protocol is to have a major economic crisis . This is why many countries in
the former Soviet Union hold the record for emission declinestheir industries collapsed . Similar
reductions are happening worldwide, though to a lesser extent. A recent report by the Environmental Integrity Project
found that, partially due to the economic slowdown, carbon dioxide emissions from U.S. power
plants dropped for the first time in years. Although some of the decrease can be traced to milder weather and
improvements in energy efficiency, the 3 percent decline in emissions from 2007 to 2008 is largely
attributed to factories closing, decreases in manufacturing, and other declines in energy
consumption. Its not just the United States that has seen a drop in emissions; the global downturn is reducing emissions
worldwide. In Europe, carbon dioxide emissions dropped by 6 percent in 2008 ; Chinas power plants have been
putting out less energy and emissions since last fall, the first drop in over a decade . However,
although these drops are good news for global warming, they arent exactly dropping in the mode the Kyoto intended. Instead of
carbon caps, improved efficiency, or alternative energylong term solutions these drops will be temporary. As

consumption goes back up, as it inevitably will, emissions will continue to rise. The problem
here is that as emissions drop and goals are met, countries may be less likely to look for
alternatives.

Growth hurts the environment- more money means more fossil fuel
use
Cadman 10 (Brie, biochemist and has a MA in Public Health, Is a bad economy good for the
environment? http://www.divinecaroline.com/life-etc/culture-causes/bad-economy-goodenvironment)

As individuals and companies cut back on expenditures, travel is one place that takes a cut.
Thats why the International Air Transport Association expects to reduce its emissions by
around 8 percent in 2009. Although airlines are looking into alternative fuels for their flights
and improvements in energy efficiency, the main decrease will simply be because fewer people
are flying. And fewer people are driving. Although gas prices are relatively low right now, last years summer
spike in prices resulted in a 6 percent decrease in gas consumption. Less driving means less
pollution and more people opting for public transportation, riding bikes, or shortening the
distance theyll travel for vacations. Although the demise of the SUV makers isnt a good thing for workers, the
decreased sales in SUVs means fewer gas guzzlers on the road. Large cars are largely becoming a thing of the past.

Growth increases consumption- encourages a disposable society

Cadman 10 (Brie, biochemist and has a MA in Public Health, Is a bad economy good for the
environment? http://www.divinecaroline.com/life-etc/culture-causes/bad-economy-goodenvironment)
Without less disposable cash to throw around, consumers are also looking for ways to reuse and
make do with less. This is inherently better for the economy, since our endless consumption

uses energy, natural resources, and contributes to the mounds of trash in our landfills. The new
light on thrift has lead to an increase in bartering; Craigslists barter section grew by 100 percent
between January 2008 and January 2009. Thrift stores have also seen increases in business.
People are also looking for ways to cut back on food costs, and many of these options are net
positive for the environment. For instance, seed sales are up this year, as more people opt to
grow their own food. This means fewer miles food has to be transported and less reliance on
large agribusiness, which is heavy on pesticides and fossil fuel fertilizers. Similarly, as people cut
back on meat consumption due to its cost, this will also reduce emissions, since meat production
uses much more fuel, water, and resources than growing grains and vegetables. And as people
tighten budgets, they become more aware of food waste.

Growth hurts the environment- fossil fuel consumption

Douthwaite 93 (Richard, council member of Comhar, the Irish government's national

sustainability council and a Fellow of the Post Carbon Institute, The Growth Illusion: how
Economic Growth Has Enriched the Few, Impoverished the Many, and Endangered the Planet,
http://www.eric.ed.gov/PDFS/ED376066.pdf)
Economic growth and increased energy use are inseparable, Nobel laureate Solow to the
contrary. All human activity involves the use of energy, and most economic growth has come
about there from the monetarization of activities which were previously clone for nothing or
through the progressive substitution of increasing amounts of fossil energy for that from human,
animal and other renewable sources. This is because, apart from improved plant varieties, most
of the technologies introduced by entrepreneurs responding to the growth imperative involve
the use of fossil fuel, even those that use humans or animals as their motive power. Consider the
bicycle, a device that greatly increases the speed at which a person can move from place to place
for the same expenditure of energy as walking. It is essentially a solid lump of fossil energy: the
power that was used to make it.

Warming
Growth leads to warming

Douthwaite 93 (Richard, council member of Comhar, the Irish government's national

sustainability council and a Fellow of the Post Carbon Institute, The Growth Illusion: how
Economic Growth Has Enriched the Few, Impoverished the Many, and Endangered the Planet,
http://www.eric.ed.gov/PDFS/ED376066.pdf)
While the elimination of CFCs is the most urgent problem facing the human race, halting the
increase in concentrations of greenhouse gases in the atmosphere to stop global warming is the
most intractable. The main problem is not that five different types of gas have to be dealt with
but that all five are the products of economic expansion and their elimination or reduction will
end the growth process, at least as it is now understood. The surprising and frightening thing
about atmospheric pollution is how recently and rapidly the damage has been done. As late as
1960 we had added only 20 per cent to the pre-industrial level of greenhouse gases. Thirty years
later we are 40 per cent above that level and we will be 100 percent above it by around 2030 if
present policies continue. Until recently, it was thought that the seventeen fold increase in the
output of CFCs between1950 and 1980 was adding substantially to the greenhouse effect, but it
is now known that it has destroyed so much high-level ozone, another green-house gas, that it
has produced no net warming. However, met lane, whose concentration in the atmosphere
doubled between 1960 and 1990, is certainly guilty, now contributing 16 per cent to the humanmade greenhouse effect. It is the result of increases in the world cattle population, the expansion
of the area under lowland rice, and releases from rubbish dumps, coalmines, and the oil and gas
industry. Another culprit is nitrous oxide, a by-product of nitrogenous fertilizer use, of the
burning of fossil and biomassfuels and of the conversion of land to agriculture. It provides 8 per
cent, about the same amount as low-level ozone the joint creation of vehicle exhausts and
sunlight. But the biggest contributor of all, at over 66 per cent, is carbon dioxide from fossil fuel
consumption, deforestation, and new types of land use.

AT: Growth Good Impacts

Dedevelopment/Transition
Peaceful transition- no war

Barry 10 (Glen, PhD in Land Resources from UW-Madison, 8/10/10 Economic Collapse and
Global Ecology, http://www.countercurrents.org/barry140108.htm)
Many will be killed as balance returns to the Earth. Most people have forgotten how to grow
food and that their identity is more than what they own. Yet there is some justice, in that those
who have lived most lightly upon the land will have an easier time of it, even as those superconsumers living in massive cities finally learn where their food comes from and that ecology is
the meaning of life. Economic collapse now means humanity and the Earth ultimately
survive to prosper again . Human suffering -- already the norm for many, but hitting the
currently materially affluent -- is inevitable given the degree to which the planet's carrying
capacity has been exceeded. We are a couple decades at most away from societal strife of a much
greater magnitude as the Earth's biosphere fails. Humanity can take the bitter medicine now,
and recover while emerging better for it; or our total collapse can be a final, fatal death swoon.
A successful revolutionary response to imminent global ecosystem collapse would
focus upon bringing down the Earth's industrial economy now . As society continues
to fail miserably to implement necessary changes to allow creation to continue, maybe the best
strategy to achieve global ecological sustainability is economic sabotage to hasten the day. It is
more fragile than it looks.

Economic collapse causes transition to a sustainable economy.

Barry 10 (Glen, PhD in Land Resources from UW-Madison, 8/10/10 Economic Collapse and
Global Ecology, http://www.countercurrents.org/barry140108.htm)
Humanity is a marvelous creation. Yet her current dilemma is unprecedented. It is not yet
known whether she is able to adapt, at some expense to her comfort and short-term well-being,
to ensure survival. If she can, all futures of economic, social and ecological collapse can be
avoided. If not it is better from a long-term biocentric viewpoint that the economic growth
machine collapse now, bringing forth the necessary change, and offering hope for a
planetary and human revival. I wish no harm to anyone, and want desperately to avoid
these prophesies foretold by ecological science. I speak for the Earth, for despite being the giver
of life, her natural voice remains largely unheard over the tumult of the end of being.

Econ Resilient
Economic collapse impossiblegovernment intervention

Amadeo 13 (Kimberly, M.S. from MIT, President of WorldMoneyWatch.com, 20 years as senior-level as business and
economy analyst. Feb 12, 2013 U.S. Economy Collapse " http://useconomy.about.com/od/criticalssues/p/US-EconomyCollapse.htm)

The U.S. economy is so large and resilient, it is highly unlikely that even these events could
create a collapse. Hyperinflation is easily tamed by the Federal Reserve's contractionary monetary tools. The
FDIC insures banks, and the Treasury can print all the money needed to make sure depositors get their funds.
Homeland Security can address the cyber-threat. If not, eventually the economy can always return
to how it functioned before the Internet. The Strategic Oil Reserves can be released to offset an oil
embargo. The U.S. military can respond to a terrorist attack, transportation stoppage, or
rioting/civil war. In other words, most Federal government programs are designed to prevent
just such an economic collapse.

US econ is resilient Housing market, manufacturing, and job

creation

Fedec 7-5 (Anna Fedec, 7/5/13; Economist at the Cracow University of Economics; US Economy
Overview 07/05; http://www.tradingeconomics.com/united-states/report)

Despite large cuts to government spending and a global slowdown, U.S. economy has been
holding pretty well. While consumer sector and housing are keeping momentum, there are
finally some signs of an improvement in labour market and manufacturing. There are finally signs of a
recovery in the labour market. Although in June jobless rate remained unchanged at 7.6 percent, the
economy added 195 Thousands Jobs and the numbers for the previous two months were
revised up. In spite of the automatic spending cuts and an expiry of a payroll tax cuts, consumer
sector remains strong. In June, the Conference Board Consumer Confidence Index surged to 81.4 from 74.3 the month
before. In May, retail sales increased 0.6% mom and 3.7% yoy. After contracting in May, manufacturing
activity grew slightly in June as the Institute for Supply Management Purchasing Managers
Index inched up to 50.9. Although it is only a small gain, in the same month, orders for durable
goods rose more than forecast pointing to higher demand for manufactured products and a
better industrial production numbers in June. Housing market remains strong. In May, home
prices jumped 12.2% yoy, the most in seven years. In the same month, existing home sales advanced 4.2%, the highest level since
November 2009. Although in May, permits for future home construction fell 3.1% yoy, in April they surged to above the 1 millionunit mark.

U.S. Economy resilient

Michalska 12 (Aleksandra Michalska, Columbia University - Graduate School of Journalism

University of Warsaw 9/13/12;, Production Assistant at MSNBCIntern, World News Tonight
with Charles Gibson at ABC News Intern, Anderson Cooper 360 at CNN
http://uk.mobile.reuters.com/article/article/idUKL1E8KD67A20120913)
U.S. stocks were little changed on Thursday, as traders awaited an announcement by Federal Reserve policymakers that's widely
expected to include further stimulus measures for the economy. Trading was light ahead of the U.S. Federal Reserve's
announcement, with about 1.5 billion shares changing hands on the major U.S. exchanges by 11:00 a.m. ET (1500 GMT). The Fed is
expected to launch a third round of quantitative easing while signaling that a weak U.S. economy may warrant ultra-low interest
rates for at least another three years. The FOMC announces its decision at about 12:30 p.m. ET (1630 GMT) as the two-day meeting
ends. Semiconductor shares fell after Citigroup cut its rating on several companies in the PC supply chain, including Intel Corp and
Marvell Technology Group Ltd. Intel slipped 0.2 percent to $23.15 and Marvell fell 1.4 percent to $10.10. The PHLX semiconductor

index lost 0.5 percent. The S&P 500 is up more than 9 percent since the start of June on expectations global central banks will act to
combat slowing growth, but some analysts said extra measures aren't necessary. "The market is fairly independent of new QE
(quantitative easing) and this rally is not built on those expectations," said Kevin Cook, senior stock strategist at Zacks Investment
Research. " The

U.S. economy is resilient enough ; big institutional investors came back to the
market in June and July and kept buying every dip," Cook said. "They are not going to go to cash,
they are certainly not piling money in Europe or China, so U.S. equities are the best place to be ."
Economic data showed the number of Americans filing new claims for jobless benefits rose more than expected last week to
382,000, with several states reporting an increase related to Tropical Storm Isaac. Wholesale prices rose 1.7 percent in August, the
largest gain since June 2009, although underlying inflation pressures were contained. The Dow Jones industrial average was up
19.01 points, or 0.14 percent, at 13,352.36. The Standard & Poor's 500 Index was up 0.41 points, or 0.03 percent, at 1,436.97. The
Nasdaq Composite Index was up 2.22 points, or 0.07 percent, at 3,116.53. Pall Corp jumped 7 percent to $62.50, the

biggest percentage gainer on the S&P 500, after the maker of filtration products reported fourth-quarter earnings
that beat Wall Street expectations. FirstMerit Corp said it would buy Citizens Republic Bancorp in an all-stock transaction valued at
about $952 million, to expand its footprint into Michigan and Wisconsin. Citizens shares gained 2 percent to $20.28
while FirstMerit dropped 10 percent to $15.37. Britain's BAE Systems and Airbus-owner EADS said they are in advanced talks to
create an industry giant that would overtake rival Boeing in sales and contend with defense cutbacks in Europe and the United
States. Boeing shed 0.4 percent to $70.62.

The Economy remains resilient housing

Reuters 6-20 (Reuters Washington, 6/20/13; U.S. activity gauge at five-year high, shows
economic resilience; http://www.reuters.com/article/2013/06/20/us-usa-economy-indexidUSBRE95J0S820130620)
(Reuters) - A

gauge of future economic activity touched its highest level in nearly five years in May
as a strengthening housing market continues to lend support to the overall economy. The
Conference Board said on Thursday that its Leading Economic Index increased 0.1 percent to 95.2 last month, the highest level since
June 2008. While the increase in the index was less than economists' expectations for a 0.2 percent gain, it followed a solid 0.8
percent rise in April. "Despite the month-to-month volatility, the LEI's six month growth rate remains

steady, suggesting that conditions in the economy remain resilient ," said Ataman Ozyildirim, an
economist at The Conference Board. "Widespread gains in the leading indicators over the last six months
suggest there is some upside potential for economic activity in the second half of the year."

Growth Causes War

Growth spurs conflict- military spending and willingness to go to war
Boehmer 2007 (Charles, Ph.D in Political Science from Penn State,
http://isanet.ccit.arizona.edu/noarchive/boehmer.html, Domestic Crisis and Interstate
Conflict: The Impact of Economic Crisis, Domestic Discord, and State Efficacy on the Decision
to Initiate Interstate Conflict)

higher rates of economic

growth should lead to more frequent (or more severe) interstate conflict. Some of these studies are
posed on the systemic level of analysis (Kondratieff 1926; Goldstein 1988; Mansfield 1988; Pollins 1996; Pollins and
Murrin 1999) while others are focused on the national level of analysis (MacFie 1938; Blainey 1988; Choucri
and North 1975; Doran 1983, 1985; Pollins and Schweller 1999). Economic growth is said to have two effects that
increase the probability of conflict. First, economic growth could allow for increases in military
spending that could increase war-making capacity (war-chest theme) or, second, that growth provides a
greater social willingness to allow leaders to opt to participate in interstate conflict. Fewer
domestic constraints should give leaders a freer hand to initiate or join conflicts
Another body of literature disagrees with the diversionary conflict thesis and contends that

Economic growth makes conflict escalation more likelyIncreases

resolve of leaders.
Boehmer, 10 (Charles Ph.D. in Political Science from Pennsylvania State University,
Economic Growth and Violent International Conflict: 1875-1999,
http://www.tandfonline.com/doi/full/10.1080/10242690903568801#tabModule)
The theory set forth earlier theorizes that economic

growth increases perceptions of state strength,

increasing the likelihood of violent interstate conflicts. Economic growth appears to increase the
resolve of leaders to stand against challenges and the willingness to escalate disputes. A nonrandom pattern exists where higher rates of GDP growth over multiple years are positively and
significantly related to the most severe international conflicts , whereas this is not true for overall conflict
initiations. Moreover, growth of mililary expenditures, as a measure of the war chest proposition, does not offer any explanation for
violent interstate conflicts. This is not to say lhat growth of military expenditures never has any effect on the occurrence of war,
although such a link is not generally true in the aggregate using a large sample of states. In comparison, higher rates of economic
growth are significantly related to violent interstate conflicts in the aggregate. States with growing economies are

more apt to reciprocate military challenges by other states and become involved in violent
interstate conflicts. The results also show that theories from the Crisis-Scarcity perspective lack
explanatory power linking GDP growth rates to war at the state level of analysis. This is not to say thai
such theories completely lack explanatory power in general, but more particularly that they cannot directly link
economic growth rates to state behavior in violent interstate conflicts . In contrast, theories of
diversionary conflict may well hold some explanatory power, although not regarding GDP growth in a
general test of states from all regions of the world across time. Perhaps diversionary theory better
explains state behaviors short of war, where the costs of externalizing domestic tensions do not
become too costly, or in relation to the foreign policies of particular countries. In many circumstances, engaging in a
war to divert attention away from domestic conditions would seemingly exacerbate domestic
crisis conditions unless the chances of victory were practically assured . Nonetheless, this study does show
that domestic conflict is associated with interstate conflict. If diversionary conflict theory has any traction as an
economic explanation of violent interstate conflicts , it may require the study of other explanatory variables
besides overall GDP growth rates, such as unemployment or inflation rales. The contribution of this article has been to
examine propositions about economic growth in a global study. Most existing studies on this topic focus on only
the United States, samples of countries that are more developed on average (due to data availability in
the past), or are based on historical information and not economic GDP data . While I have shown that there

is no strong evidence linking military expenditures to violent interstate conflicts at the state level of analysis, much of the remaining
Growth-as-Catalyst perspective is grounded in propositions that are not directly germane to questions about state conflict behavior,
such as those linking state behavior to long-cycles, or those that remain at the systemic level. What answer remains linking economic
growth to war once we eliminate military expenditures as an explanation? Considering that the concept of foreign policy mood is
difficult to identify and measure, and that the bulk of the literature relies solely on the American historical experience, I do not rely
on that concept. It is still possible that such moods affect some decision-makers. Instead, similar to Blainey, I find that economic

growth, when sustained over a stretch of years, has its strongest effect on states once they find
themselves in an international crisis. The results of this study suggest that states such as China, which have a
higher level of opportunity to become involved in violent interstate conflicts due to their
capabilities, geographic location, history of conflict, and so on, should also have a higher
willingness to fight after enjoying multiple years of recent economic growth. One does not have to
assume that an aggressive China will emerge from growth. If conflicts do present themselves, then China may be more
likely to escalate a war given its recent national performance.

Growth causes leaders to be overly militaristic- popularity

Boehmer 2007 (Charles, Ph.D in Political Science from Penn State,

http://isanet.ccit.arizona.edu/noarchive/boehmer.html, Domestic Crisis and Interstate
Conflict: The Impact of Economic Crisis, Domestic Discord, and State Efficacy on the Decision
to Initiate Interstate Conflict)
Admittedly, theories in this category are no more developed (arguably less so) than diversionary conflict theory. However, some
insights are useful that I hope to explicate below. All leaders depend on a constituency of some sort (Bueno de
Mesquita et al. 1999) and always

face potential opposition to their policies (Richards et al., 1993; Hagan 1994;
democratic systems, opposition parties may seek to exploit foreign
policies that they will argue are not in the best interest of the nation and executives in democracies should be more
constrained than their authoritarian counterparts. But during times of economic prosperity, society is less
likely to be influenced by the rhetoric of parties and factions that stand in opposition to the
leader. Assuming that popularity ratings are higher than would be the case during economic
recession or depression, leaders should be more apt to initiate or reciprocate military actions .
Miller 1995, 1999; Heldt 1999). In

Economic growth should reduce societal resistance to conflict. This may seem like a counter-intuitive proposition that people that
should be relatively better off and happy during periods of prosperity would allow leaders to opt for foreign conflicts. However,

some people may become more nationalistic or xenophobic during times of prosperity and
optimistic that success could be achieved in foreign conflicts . Blainey (1988) claims that anything that
increases optimism and state strength should be thought of as a cause of war. However, it is most likely that this effect could
heighten the risk of foreign conflict by reducing constraints placed on executives. For example, would the Clinton

administration have been able to commit US troops to conflicts in Bosnia and Kosovo , areas where
US interests were debatable, without stauncher Republican resistance in Congress if the economy had not experienced
prolonged prosperity and economic growth?

AT: Collapse Causes Conflict

Economic crisis does not cause war

Barnett 09 (Thomas P.M., PhD in Political science from Harvard University, Department of
Navy's Center for Naval Analyses, professor at Naval War College, worked at the Office of
Secretary of Defense" 24 Aug 2009, The New Rules: Security Remains Stable Amid Financial
Crisis http://www.worldpoliticsreview.com/articles/4213/the-new-rules-security-remainsstable-amid-financial-crisis)
When the global financial crisis struck roughly a year ago, the blogosphere was ablaze with all sorts of scary
predictions of, and commentary regarding, ensuing conflict and wars -- a rerun of the Great Depression leading to world war, as it were. Now, as global economic news
brightens and recovery -- surprisingly led by China and emerging markets -- is the talk of the day, it's interesting to look back over the past year and realize how globalization's first truly worldwide

recession has had virtually no impact whatsoever on the international security

landscape. None of the more than three-dozen ongoing conflicts listed by GlobalSecurity.org can be clearly attributed to the
global recession. Indeed, the last new entry (civil conflict between Hamas and Fatah in the Palestine) predates the economic crisis by
a year, and three quarters of the chronic struggles began in the last century. Ditto for the 15 low-intensity conflicts listed by Wikipedia (where the latest entry is the Mexican "drug war" begun in 2006).
Certainly, the Russia-Georgia conflict last August was specifically timed, but by most accounts the opening ceremony of the Beijing Olympics was the most important external trigger (followed by the U.S.
presidential campaign) for that sudden spike in an almost two-decade long struggle between Georgia and its two breakaway regions. Looking over the various databases, then, we see a most familiar picture: the
usual mix of civil conflicts, insurgencies, and liberation-themed terrorist movements. Besides the recent Russia-Georgia dust-up, the only two potential state-on-state wars (North v. South Korea, Israel v. Iran) are
both tied to one side acquiring a nuclear weapon capacity -- a process wholly unrelated to global economic trends. And with the United States effectively tied down by its two ongoing major interventions (Iraq and
Afghanistan-bleeding-into-Pakistan), our involvement elsewhere around the planet has been quite modest, both leading up to and following the onset of the economic crisis: e.g., the usual counter-drug efforts in
Latin America, the usual military exercises with allies across Asia, mixing it up with pirates off Somalia's coast). Everywhere else we find serious instability we pretty much let it burn, occasionally pressing the

No significant
uptick in mass violence or unrest (remember the smattering of urban riots last year in places like Greece, Moldova and Latvia?); *The usual
frequency maintained in civil conflicts (in all the usual places); *Not a single state-on-state war directly caused
(and no great-power-on-great-power crises even triggered); * No great improvement or disruption in great-power cooperation
regarding the emergence of new nuclear powers (despite all that diplomacy); *A modest scaling back of international policing efforts by the system's
acknowledged Leviathan power (inevitable given the strain); and * No serious efforts by any rising great power to challenge that Leviathan or
Chinese -- unsuccessfully -- to do something. Our new Africa Command, for example, hasn't led us to anything beyond advising and training local forces. So, to sum up: *

supplant its role. (The worst things we can cite are Moscow's occasional deployments of strategic assets to the Western hemisphere and its weak efforts to outbid the United States on basing rights in Kyrgyzstan;
but the best include China and India stepping up their aid and investments in Afghanistan and Iraq.) Sure, we've finally seen global defense spending surpass the previous world record set in the late 1980s, but
even that's likely to wane given the stress on public budgets created by all this unprecedented "stimulus" spending. If anything, the friendly cooperation on such stimulus packaging was the most notable great-

Can we say that the world has suffered a distinct shift to political radicalism as a
result of the economic crisis? Indeed, no . The world's major economies remain governed by center-left or center-right political factions that remain decidedly friendly to
power dynamic caused by the crisis.

both markets and trade. In the short run, there were attempts across the board to insulate economies from immediate damage (in effect, as much protectionism as allowed under current trade rules), but there was
no great slide into "trade wars." Instead, the World Trade Organization is functioning as it was designed to function, and regional efforts toward free-trade agreements have not slowed. Can we say Islamic
radicalism was inflamed by the economic crisis? If it was, that shift was clearly overwhelmed by the Islamic world's growing disenchantment with the brutality displayed by violent extremist groups such as al-

At the end of the day, the

economic crisis did not prove to be sufficiently frightening to provoke major economies into
establishing global regulatory schemes, even as it has sparked a spirited -- and much needed, as I argued last week -- discussion of the continuing viability of the U.S.
dollar as the world's primary reserve currency. Naturally, plenty of experts and pundits have attached great significance to this
debate, seeing in it the beginning of "economic warfare" and the like between "fading" America
and "rising" China. And yet, in a world of globally integrated production chains and interconnected financial markets, such "diverging interests" hardly
constitute signposts for wars up ahead. Frankly, I don't welcome a world in which America's fiscal profligacy goes undisciplined, so bring it on -- please! Add it
all up and it's fair to say that this global financial crisis has proven the great resilience of
America's post-World War II international liberal trade order.
Qaida. And looking forward, austere economic times are just as likely to breed connecting evangelicalism as disconnecting fundamentalism.

Financial crisis wont destroy the worldlong timeframe

Snyder 12 (Michael, J.D. from University of Florida, June 11th, 2012, "The Economic Collapse
Is Not A Single Event" http://theeconomiccollapseblog.com/archives/the-economic-collapse-isnot-a-single-event)
Many people hype "the coming economic collapse" as if it is some kind of big summer
Hollywood blockbuster. Many people out there write about it as if it is something that will
happen in a single day or over a few weeks and that it will suddenly change how the entire world
functions. But that is not how the financial world works. The financial world is like a

game of chess - very slow and methodical. Yes, there are times when things happen very quickly (like back in 2008), but even
that crisis played out over a number of months. Sadly, most Americans are not used to thinking in terms of months or years. These days, most
Americans have the attention span of a goldfish and most Americans have been trained to expect instant gratification. They are simply not accustomed
to being patient and to wait for things. Well, despite what you may have read, the economic collapse is not going to be a single event. It is going to play
out over quite a few years. In some ways we are experiencing an economic collapse right now. When the next major financial crisis occurs, many will be
calling that "an economic collapse". But if you really want to grasp what is happening to us, you need to think long-term. We are heading for a complete

Yes, there will certainly be times of great

chaos. The financial crisis of 2008 was one of those moments. But the financial crisis of
and total nightmare, but it is going to take some time to get to the end of the story.

2008 did not completely destroy us. Neither will the next crisis. I think it is helpful to
think of what is happening to us as a series of waves. When you build a beautiful sand castle on
the beach, the first wave that comes in does not totally destroy it. Rather, the first wave weakens the castle and it is
destroyed by subsequent waves. Well, that is what is happening to us. The financial crisis of 2008 was a wave. The epicenter of
the next great financial crisis will be in Europe and that will be another wave. For many, the next financial crisis will
feel like "the end of the world" but it won't be.

There will be waves after that one that will be even worse. Yes,

the waves are going to start coming more rapidly and will start becoming more intense. In that way, they will kind of be like birth pains. But these
problems did not build up overnight and they are not going to disappear overnight either. A lot of people that write about the coming economic collapse
seem to suggest that we should just let it happen so that the "recovery" can begin. Unfortunately, it is not going to be so simple. It took decades to build
up a national debt of almost 16 trillion dollars. It took decades for American consumers to build up the greatest consumer debt bubble in the history of
the world. It took decades to gut the economic infrastructure of the United States and ship millions of our jobs overseas. These problems are going to
plague us for a very long time. Sadly,

a lot of people out there seem to wish for an economic apocalypse.

They seem to think that if the global financial system crashes that the government is going to
disappear and we are going to start fighting with each other using sharp pointed sticks. Well,
it simply is not going to happen.

AT: Interdependence Checks

Quantity of trade has no correlation with conflict

Peterson 13. (Timothy M., PhD from University of Missouri and Assistant Professor of
Political Science at Oklahoma State University. Dyadic Trade, Exit Costs and Conflict. March
13, 2013. Journal of Conflict Resolution. Sage.)
the vast
majority of empirical studies testing this relationship measure trade as the extent of interaction
Despite the fact that exit costs are intrinsic elements of both liberal and realist theories linking trade to conflict,

(dyadic trade flows, often weighted by gross domestic product [GDP] or total national trade). This modeling decision tends to follow
from practical considerations, given that measures of trade interaction are easily available.2 However, because these blunt

measures ignore the exit costs associated with cutting off trade relations , they are limited in their
explanatory power. For example, a larger volume of dyadic trade may not equate with a larger
incentive to avoid conflict (as adherents of the peace through trade hypothesis contend) if one or both dyad
members can easily reroute lost trade flows to alternative markets; conversely, smaller volumes
of trade may be pacifying if both trade partners cannot reap equivalent gains with third parties .
Similarly, large trade volumes may not raise concerns for vulnerability if interrupted trade
would be easily replaced. Given that measures of trade interaction are not well suited to answering research questions
regarding the costs of cutting off trade, these measures have instead facilitated a second strand of liberal
theory, which links trade to peace through increasing information flows that accompany
economic interaction, reducing the information asymmetries that lead to conflict (Gartzke, Li, and
Boehmer 2001; Gartzke 2003; Morrow 1999; see also Fearon 1995).

Economic interdependence makes nations go to war

Copeland, 96(Dale Professor -Department of Government and Foreign Affairs at the

University of Virginia, "Economic Interdependence and War: A Theory of Trade Expectations,"
http://www.mtholyoke.edu/acad/intrel/copeland.htm]
Realists turn the liberal argument on its head, arguing that economic

interdependence not only fails to promote

peace, but in fact heightens the likelihood of war.(8) States concerned about security will dislike
dependence, since it means that crucial imported goods could be cut off during a crisis. This
problem is particularly acute for imports like oil and raw materials ; while they may be only a small
percentage of the total import bill, without them most modern economies would collapse.
Consequently, states dependent on others for vital goods have an increased incentive to go to war to assure themselves of continued
access of supply. Neorealist Kenneth Waltz puts the argument as follows: actors within a domestic polity have little

reason to fear the dependence that goes with specialization . The anarchic structure of international
politics, however, makes states worry about their vulnerability, thus compelling them "to control what they
depend on or to lessen the extent of their dependency." For Waltz, it is this "simple thought" that explains, among other things,
"their imperial thrusts to widen the scope of their control ."(9) For John Mearsheimer, nations that

"depend on others for critical economic supplies will fear cutoff or blackmail in time of crisis or
war." Consequently, "they may try to extend political control to the source of supply, giving rise to
conflict with the source or with its other customers." Interdependence, therefore, "will probably
lead to greater security competition."(10)

Interdependence causes war -- states seek resources to prevent

dependency during crisis.

Copeland, 96(Dale Professor -Department of Government and Foreign Affairs at the

University of Virginia, "Economic Interdependence and War: A Theory of Trade Expectations,"
http://www.mtholyoke.edu/acad/intrel/copeland.htm]
Realists turn the liberal argument on its head, arguing that economic

interdependence not only fails to promote

peace, but in fact heightens the likelihood of war.(8) States concerned about security will dislike
dependence, since it means that crucial imported goods could be cut off during a crisis . This
problem is particularly acute for imports like oil and raw materials; while they may be only a small percentage of
the total import bill, without them most modern economies would collapse. Consequently, states dependent on
others for vital goods have an increased incentive to go to war to assure themselves of continued
access of supply. Neorealist Kenneth Waltz puts the argument as follows: actors within a domestic polity have little reason to
fear the dependence that goes with specialization. The anarchic structure of international politics, however,
makes states worry about their vulnerability, thus compelling them "to control what they
depend on or to lessen the extent of their dependency ." For Waltz, it is this "simple thought" that explains,
among other things, "their imperial thrusts to widen the scope of their control."(9) For John Mearsheimer, nations that
"depend on others for critical economic supplies will fear cutoff or blackmail in time of crisis or
war." Consequently, "they may try to extend political control to the source of supply, giving rise to
conflict with the source or with its other customers." Interdependence, therefore, "will probably lead to
greater security competition."(10) This modern realist understanding of economic interdependence and war finds its
roots in mercantilist writings dating from the seventeenth century. Mercantilists saw states as locked in a competition for relative
power and for the wealth that underpins that power.(11) For mercantilists, imperial expansion - the acquisition of colonies - is driven
by the state's need to secure greater control over sources of supply and markets for its goods, and to build relative power in the
process. By allowing the metropole and the colonies to specialize in production and trade of complementary products (particularly
manufactured goods for raw materials), while ensuring political control over the process, colonies "opened up the possibility of
providing a system of supply within a self-contained empire."(12) In this, we see the underpinning for the neorealist view that
interdependence leads to war. Mercantilist imperialism represents a reaction to a state's dependence; states reduce their

fears of external specialization by increasing internal specialization within a now larger political
realm. The imperial state as it expands thus acquires more and more of the characteristics of Waltz's domestic polity, with its
hierarchy of specialized functions secure from the unpredictable policies of others. In sum, realists seek to emphasize one main
point: political concerns driven by anarchy must be injected into the liberal calculus. Since states

must be primarily concerned with security and therefore with control over resources and markets, one
must discount the liberal optimism that great trading partners will always continue to be great trading partners simply because both
states benefit absolutely. Accordingly, a state vulnerable to another's policies because of dependence will

tend to use force to overcome that vulnerability.

AT: Diversionary Theory

Diversionary theory is wrong-leaders get removed from office

Boehmer 2007 (Charles, Ph.D in Political Science from Penn State,

http://isanet.ccit.arizona.edu/noarchive/boehmer.html, Domestic Crisis and Interstate
Conflict: The Impact of Economic Crisis, Domestic Discord, and State Efficacy on the Decision
to Initiate Interstate Conflict)
Theories of diversionary conflict make a few basic assumptions . First, leaders seek to remain in office.
Second, leaders have some latitude to use military force. Third, leader approval is in part determined by the state of the economy.
Lastly, the use of military force results in a rally effect that increases leader popularity. Yet, while these assumptions

appear reasonable and help simplify theories, they may not be the most appropriate or
informative towards an explanation of the decision to engage in interstate conflict. From these
pieces we cannot put together the whole diversionary puzzle . Other components of the story are
missing and unaccounted for. For example, is there a difference between scape-goating and
externalizing conflict? Disparate studies have discussed the roles of regime types, repression, the magnitude of domestic
conflict, opportunities for participation in foreign disputes, and differences in how the severity of international conflict should affect
the prospects of successful diversion. However, many theoretical linkages remain unclear in individual

studies. I find the claim that lower rates of economic growth should motivate diversionary
behavior less than convincing since other studies suggest that lower rates of growth increase the
probability that leaders will be removed from office (Londregan and Poole 1990; Bloomberg and Hess 2002).
Empirical research also suggests that incumbents in democracies are most likely to lose elections following
periods of economic stagnation (Lewis-Beck 1988). Logically, lower rates of economic growth should
heighten the risk leaders face, no matter whether they are democrats or autocrats. Perhaps leaders do
gamble for resurrection, although many could be removed from power before they may be able to
attempt this strategy.

AT: Key Sectors

AT: Agriculture
Agriculture Bubble takes out the internal link

Kohl 10 (David Kohl is professor emeritus at Virginia Tech, Is There a Bubble in the Agriculture
Economy? Aug. 3, 2010 | Corn and Soybean Digest
http://cornandsoybeandigest.com/marketing/there-bubble-agriculture-economy)
The bubble in the general economy was created by a combination of factors, both political and
economic. First was the overturn of the Glass-Steagall Act, which separated commercial and
investment banking. This, in turn, created shadow investment banks that kicked the can
forward concerning risk, i.e. selling of loans in the U.S. and abroad. Second was the inflow of
foreign money, which artificially kept interest rates low encouraging leverage. The third factor
was political and regulatory policy encouraging home ownershi p. This enabled and encouraged people to
purchase houses and build commercial buildings that they could not afford or justify in the marketplace. The result was decline in
the value of real estate by 52% in Las Vegas, and over 40% in Los Angeles, San Francisco and Miami. Is there a bubble in North
American agriculture? Perhaps it is confined to the grain segment, depending on emerging-market-

countries demand, and rural areas with large amounts of oil, minerals and water availability
and rights. Asset values in these areas have increased due to growth in worldwide emerging
markets and the alternative energy industry. A slowdown or shift in course in either area may
result in a correction, but a small probability of a crash. P.S. Banking and lending school attendees have been concerned that
aggressive growth and expansion in the livestock industry and somewhat in grains, land in transition to non-agricultural uses, as
well as cyclical downturns in the livestock industry, are the frontlines of the current problem loans.

Agriculture boom means the coming bust takes out the internal link

Caldwell 13 (Jeff Caldwell 05/06/2013 Multimedia Editor for Agriculture.com and Successful
Farming magazine. Ag's booming . . . will it bust soon?
http://www.agriculture.com/news/business/ags-booming-will-it-bust-soon_5-ar31326)
For every boom, there's a bust. For every period of prosperity -- like the one that's under way for
a lot of crop farmers who have seen a robust marketplace for their products -- there's a
downturn right around the corner. Businesses like farming are cyclical in nature, and centuries of economic theory
backs that up. So when will the bust happen for corn and soybean farmers who have enjoyed high prices and profit margins over the
last few years? That answer is not clear. There are some major "ifs" in play, and though there are decades of

precedents that indicate the bust is coming soon, today's circumstances aren't the same as in the
1910s and 1970s, periods of prosperity that preceded downturns. "Historically, the sharp
accumulation of debt has preceded financial crises. After farm booms in the 1910s and 1970s, lower incomes and
higher interest rates contributed to farm financial crises and waves of farm bankruptcies during the 1920s and 1980s," says Jason
Henderson, Federal Reserve Bank of Kansas City vice president and Omaha branch executive. "Rising bankruptcies and the resulting
deleveraging in agriculture echoes the recent financial crisis, which was characterized by home foreclosures and lost housing
wealth." Marketing Talk: Is a 'bust' coming? What's happened at those times? The boom times have a common thread. "Farm
enterprises historically have used wealth to support consumption and investments when income fades," Henderson says. "During
years of low income, farmers tap their existing wealth to finance spending on capital investments such as buildings, vehicles,
machinery, and other equipment. Thus, similar to nonfarm households, the wealth effect often leads to

sharp increases in debt and leverage in farm enterprises." So, boom times are followed by busts
simply because the investments from times of prosperity essentially are sucked up by the low
times out of necessity. It keeps farm businesses alive, for the most part, but it draws down farm
equity and sometimes forces farmers to incur debt to stay afloat . That opens the chute between the boom
and subsequent bust. "Farm enterprises are assumed to allocate profits between current investment and retained equity. Farm
investments depend on the total resources of the enterprise -- profits and wealth. During less profitable times, instead of allowing
investments to fall with profits, farmers tap their existing wealth to finance and maintain their capital investments near previous
levels," Henderson says. "In addition, absent financial market stress, lenders also can contribute to the

wealth effect by being more willing to lend to farm enterprises that have greater levels of equity
to use as collateral for loans." So, where does today's farm economy sit? Are we poised for a slide
into the tank? First, Henderson says it's important to see how today's circumstances may differ

from those in past notable boom-bust cycles. Is there sufficient difference today to prevent a
bust in the next year or so? "In 2013, historically high farm incomes are projected to keep U.S.
farm debt and leverage low. Yet, longer-term projections suggest that farm incomes could fall dramatically in 2014. If
agricultures historical wealth effect holds true, farm enterprises might use existing wealth to finance and smooth investment
spending, sowing the seeds for another round of debt accumulation," Henderson says. " As long as farm wealth remains

elevated and interest rates remain low, real estate and non-real estate investments by farmers
could continue to remain high even with lower profits. If historical precedence holds and
farmers use debt instead of retained earnings to finance capital investments, the wealth effect
may trigger another phase of the leverage cycle. Current farm debt ratios remain near historical
lows. Yet, projections of lower farm incomes, high wealth, and low interest rates are the recipe
for another wealth effect in U.S. agriculture."

AT: Aerospace
Their internal link is backwards aerospace company projections are
based off of the overall GDP
AMD 11 - Aerospace Manufacturing & Design Magazine

[Positive predictions for 2011, FEBRUARY 2011, http://www.onlineamd.com/amd-0211-positive-predictions-2011.aspx]

What is ahead for the aerospace industry in 2011 and beyond? How can small and medium sized firms plan in todays narrow field of
new weapon systems, a global economy in transition, and an ever changing challenge of new and advanced science and technology?
The best way to plan is to trust your instruments, or the aerospace indicators. Based on todays data, the gauges and instruments are
clear that 2011 will be a year of growth.

According to the Aerospace Economic Report and Outlook 2010, recently published by EmbryRiddle Aeronautical University (Barr et. al.), major OEMs and primes like Boeing, Lockheed Martin, EADS,
and others forecast the near and long term future of aerospace manufacturing on the growth of
Gross Domestic Product (GDP). The underlying principal is that the economy changes first , either up or
down, and then the industry simply follows suit. Tracking the GDP, one clearly sees the trend of
the economy.

No impact to aerospace decline - empirics

Hill 10 Edward Hill et al, Independent Defense & Space Professional, 10- (Economic Shocks
and Regional Economic Resilience May 10, 2010 https://www.google.com/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDIQFjAA&url=http%3A%2F%2Fwww.gwu.edu%2F~gwipp%2FHill%2520et
%2520al%2520Economic%2520Shocks%2520and%2520Regional%2520Economic%2520Resilience%2520%25205-1010.doc&ei=D4TpUaKvBYeM9ASyn4CoAw&usg=AFQjCNFjMcrHvtRBoSpiAeguDr1e5eURQ&sig2=7aNQxBKFpN8CIC_CcCueUQ&bvm=bv.49478099,d.eWU)
Employment downturns in the Seattle regional economy have occurred around the time of national recession periods. The region
experienced shock-induced downturns in 1980-81, 1990, 1993, and 2000-01. It was resilient to the 1993 and 2000-01 shock-induced
downturns, but not resilient to the 1980 downturn. (There was little opportunity for resilience to the 1990 downturn because the
1993 downturn occurred so soon thereafter.) Shocks to the regions major export industries preceded or accompanied the aggregate
regional downturns. Wood products (formerly a major regional export industry) suffered employment downturns in 1978-79.
Software had such downturns in 1993 and 2000-01, although these downturns appeared as sharp reductions of the industrys
employment growth rate rather than as job losses. (Microsoft, the regions largest information technology employer, laid off workers
for the first time during the Great Recession.) Aerospace experienced downturns in 1980-82, 1990-93, 1998-

99, and 2002, and all these downturns were employment declines. However, their impact on the
region as a whole probably became less severe over time as Boeing, the regions largest
manufacturer, accounted for a declining (though still substantial) share of the regions
employment . The regional economic development policymakers and practitioners we interviewed perceived the Great
Recession as the regions most severe economic downturn since the early 1970s, although as of the time we conducted our interviews
(July 2009) the regions employment was higher, as a percentage of pre-recession employment, than at the same time after the 2001
recession, and it had not hit the employment trough that it reached after the 1981 recession. After the severe early 1970s recession,
policymakers perceived a need to diversify the regions economy away from its strong reliance on aerospace manufacturing in
general and Boeing in particular. Local government and business leaders created the King County Economic Development Council,
now called Enterprise Seattle, to recruit new firms to the region. However, diversification of the employment base came about not as
a result of any deliberate policy or strategy but because of a historical accident: Bill Gates moved Microsoft to the region in 1979.
Other information technology-intensive firms (Starbucks, Amazon, and Costco, as well as suppliers to them and to Microsoft) sprang
up subsequently, in part to take advantage of proximity to Microsoft and the large pool if information technology workers that it
attracted to the region. (Some local information technology companies were founded by former Microsoft managers or engineers.)
As of July 2009, no public or private organization had undertaken or planned any policy or strategy to restructure the regional
economy in response to the Great Recession. Our interviewees did not think any such restructuring was necessary. They viewed the
regional economy as sufficiently diverse because it is built around two large firms, Boeing and Microsoft, which have steadily
introduced new products and around which distinct industry clusters (in aerospace and information technology, respectively) have
formed. Our interviewees believed that the regions eventual recovery from the Great Recession would be a continuation of prerecession trends, including further growth of the information technology industry and the gradual movement of Boeing away from
the region (including the relocation of the firms headquarters to Chicago and its opening of a new aircraft production line in South
Carolina, its first outside the Seattle area). They also anticipated further growth of the nonprofit sector, which has been fueled largely
by funding from current and former Microsoft executives. Hartford Employment shock-induced downturns in the Hartford regional
economy occurred around national recession periods in 1980-81 and 2001-02. However, the region experienced a downturn in

1988-90 rather than in 1990-91 as the nation as a whole did. The region was resilient to the 1980-81 and 2001-02 shocks within two
years but was not resilient to late 1980s shock.

Theres a degree of separation between the aerospace industry and

the economy

Ostrower 10 (Jon Ostrower writes about aerospace from The Wall Street Journal's Chicago
bureau on August 17, 2010 Is a recovering economy inflating a new aviation bubble?
http://www.flightglobal.com/blogs/flightblogger/2010/08/is-a-recovering-economyinflat.html)
Dusting off 747-400s after their stay in the desert is a good sign of a recovering global economy.
The long-range, high capacity jumbo's return to service with airlines like Cathay Pacific, British
Airways and United Airlines signals a resurgence of strong demand on a diverse array of routes .
While it is no longer the most efficient aircraft in its class with the larger A380 or slightly smaller 777-300ER filling its previous role,
the need for capacity growth is outweighing the reintroduction of the less efficient type. Though, with each individual carrier making
decisions based on increases in demand, Bloomberg's report on capacity increases introduces this variable: "Everybody is

getting very excited about passenger and cargo volumes coming back, but there's a great
temptation to add too much capacity," said Chris Tarry, an independent airline analyst and
strategy consultant in London who has followed the industry for almost three decades. "What may
be rational fleet decisions for individual airlines can add up to a problem for the industry when taken together." This trend of
bringing aircraft out of the desert along with production output rising on nearly every commercial assembly line at Boeing and
Airbus, commercial aerospace, by all outward appearances, is a solid barometer of the way toward a global economic recovery. Yet,

like all good cause and effect equations, is commercial aviation a leading or trailing indicator of
global growth? It's like dividing by zero, it will make you cross eyed if you think about it too
long. Unleashed pent up demand from lessors came to the fore at Farnborough with lessors
signing up for billions of dollars worth of aircraft, but for Richard Aboulafia - who has a pesky
habit of hitting the nail on the head - the order bonanza may be shortsighted. Here's reason two of six
the parade might be premature: 2. There's a degree of separation between the air travel market and the
economy. Passenger and cargo traffic are doing great, and airlines are making money. Yet today's traffic numbers are
now completely disconnected from, and way better than, the economic indicators that typically
drive them. Stock prices, GDP growth, inflation (or even deflation), bond rates, retail sales,
housing inventories, employment, and consumer confidence numbers in the US and Europe all
show continuing uncertainty. The numbers across the world's largest economies are decidedly uneven: Germany is
growing like gangbusters, but the US and Japan are sputtering and Chinese factory output slowed for the fifth month straight.
Economic indicators are all going in different directions, so what's an airline to do? Too many aircraft in the marketplace could
wreak long-term havoc on airlines, lessors and manufacturers alike. Let's just hope the painful lessons in capacity discipline didn't
get parked in the desert too.

AT: Biotech
Biotech is unsustainableventure capital and a lack of profitability
Hood 09 (Katie Hood he Chief Executive Officer of The Michael J. Fox Foundation for
Parkinsons Research Graduated from Harvard January 23, 2009 | 01:27 PM (EST) As the
Biotech Bubble Pops...http://www.huffingtonpost.com/katie-hood/as-the-biotech-bubblepop_b_160389.html)
While layoffs seem to be all too common these days given the nosedive our economy has taken in the past year, Pfizer's

layoffs
likely point to issues that I think are disconnected from other sectors' struggles. For decades, we
all have counted on the private sector to drive progress toward new drugs and treatments for
disease, but there is a chance -- through no fault of their own, unlike what we're seeing with
financial institutions -- that the pharma/biotech development model is built for the era of firstgeneration drug discoveries like those made in past decades, not for the discovery of drugs for
diseases that are several steps up the complexity staircase . In an era of change, we may need to reconsider a
more deliberate role for the public sector in driving discovery into development, and potentially through the first stages of what has
been traditionally viewed as "commercial" development. At the risk of stating the obvious, biology is hard. Shareholders'

desired horizon for payoff may not be aligned with what pharmaceutical companies can
realistically provide--especially in an era where the low-hanging fruit may be gone. This is old news,
but only for those "in the know" -- and I think it's critically important for a broader group of stakeholders to think about the way
things work today and why we might be headed for an even greater slowdown in the development of new medical treatments that
can improve and save lives than we've already experienced to date. Here is a broad overview of what I see from where I sit, and why
I'm concerned. For at least the last 10 years, we've watched the big pharmaceutical companies, if

they stay in core research at all, eliminate their internal core research efforts into anything but
disease areas with the largest pools of possible customers. While it gives one pause to see the giants of the last
drug development revolution scale back so significantly, clearly redefining the model of their business, the void has been filled by the
explosion of the biotechnology sector during the same timeframe. Today the biotech sector encompasses a seemingly endless range
of narrowcast companies and focuses, but almost all of them start the same way: as small, nimble, research-focused enterprises with
passionate scientific founders who are tackling a particular disease or class of diseases using newly discovered technologies. These

companies often are started by a basic researcher who has discovered in his academic lab
something commercially viable; to capitalize on this discovery, a biotech is formed. In their
earliest days, many of these companies are funded primarily by angel investors and occasionally
by the federal government's Small Business Innovation Research program. Others are funded by
venture capital firms that look for relatively rapid translation from concept to product to clinical
testing and that don't usually have the patience or funds to spend years working out solutions to
unexpected problems or obstacles encountered along the way . As these young biotech companies progress
through the earliest stages of drug development -- compound screening and product development, including in vitro and in vivo
testing -- they frequently live hand to mouth, as traditional NIH funding, the bread and butter for the academic labs that made the
initial discovery, is not available to the companies founded to carry the discovery forward. If the science is successful, possibilities
begin to emerge. One is a license or joint-development agreement, or even acquisition by a

pharmaceutical company like Pfizer, willing to pay to bring innovation and potential
blockbusters into their pipeline. But over the last 10 years, Big Pharma has become increasingly
risk-averse about when they will pay. Most will not seriously consider a joint-development agreement without clinical
data nor an acquisition without controlled, Phase 2 results -- confirmation of efficacy in a double-blind, placebo-controlled trial. A
second possibility is that the biotech grows through private venture capital financing until it can
go public. But even those companies with early funding from marquee venture capital firms run
into difficulty securing additional rounds of financing to support product development over the
timeframe that may be required. Venture capitalists typically need payback on their investment
(i.e., the "exit strategy") in a five-to-seven-year horizon, if not earlier -- and thus cannot
continue to support programs that hold great promise but have run into problems. As I've observed
this business over the past six years, my biggest concern about this increasingly complex and somewhat disjointed drug development
pipeline has been not a sense of fundamental malfunction in the system itself but how the emergence of increasing numbers of new
biotech players leads to increased dysfunction in information-sharing among players on the front lines. Given that "hoarding"
information (even non-competitive information) is already much more common than sharing it in the biological sciences, this is

saying something. As technical and innovation expertise migrates to start-ups -- many of whom don't talk to each other, let alone to
pharmaceutical companies --positive and negative outcomes from early applied work cannot be shared and understood as clearly as
it was when the vast majority of R&D took place under Big Pharma's collective roof. As I write this, though, I have an

increasing fear of something even more problematic: What happens to this intermediated
system if funding dries up in the middle? What happens when the venture capitalists realize
that, as Professor Gordon says, "It's really hard to turn a research dollar into a profit dollar?" For
that is certainly what we are seeing today, and it seems that this is not an issue that will go away anytime soon. I've written before
about my strong belief that more private research funders should adopt deliberate strategies to accelerate drug development -- as
our foundation and a handful of others have. But the hard truth is that, while foundations can provide

critical capital to translational research and play a leadership role in raising awareness of the
issues facing disease research, our money will ultimately be only a drop in the bucket of what's
required to develop new treatments for the illnesses we're committed to curing. The best we can
hope for, to paraphrase Melinda Gates, is to shine light on new ways and new models for
tackling the challenges at hand. In a scenario where pharma is axing research, publicly traded biotech companies are
running out of cash (the Biotechnology Industry Organization, the chief organizing and lobbying group for the biotech sector,
estimates that 45 percent of publicly traded biotechs will run out of cash in the next six to 12 months), and venture capitalists are
retreating as they recognize how damn hard it is to transform research costs into profitability, what can we expect of the next 10
years... particularly as the buoyant economy of the last 10 comes to a screeching halt? Problems. Major problems. For both publicly
traded and emerging private biotechs, if investors decide that the risk outweighs the reward, we will see even longer development
cycles or perhaps no investment in converting discovery into treatments at all. We all will be left holding the bag -- in the form of a
giant void in funding, one whose impact cannot be overestimated . One that the government is not prepared to

handle, and one that private foundations simply don't have the capital or scope to impact. The
10 to 15 years it currently takes to develop a new therapeutic, already a timeframe impermissibly
long for those individuals struggling with disease and their family members, will be drawn out
and the path to advances will be stalled. The answer doesn't lie simply in a stimulus package of one kind or another.
It's far more complicated than that, and incremental change won't cut the mustard. But this is an issue that affects all of us, one
that's too big to ignore. As President Obama noted, the time has come to stop putting off unpleasant decisions and instead meet the
demands of a new age. We need to take an honest look at the medical research enterprise to assess

what's working and what's not. Are players' incentives aligned? Do risks match reward? It's
critical that smart people who may never have thought about the drug development pipeline
become engaged in this subject now -- before medical research slams into the wall.

Expiring patents takes out the internal link

5 star equities 12 (Five Star Equities Provides Stock Research on Sequenom and TrovaGene ,
Thu, Jun 21, 2012 8:20 AM EDT , Merger and Acquisition Speculation in Biotech Industry
Growing as a Result of Expiring Patents MarketwirePress Release: Five Star Equities
http://finance.yahoo.com/news/merger-acquisition-speculation-biotech-industry122000130.html)
Expiring patents have been a major dilemma for pharmaceutical companies. New products that
are being introduced are not expected to generate the same level of revenues of the products that
have lost patent protection. In the last decade the Pharmaceutical Industry has spent $1.1
trillion on research and development as companies scramble to replace lost revenues from
patent expirations. Mergers & Acquisitions activity is expected to pick up in 2012 as companies look to make up for loss
revenues. M&A allow companies to acquire products that are already proven in the market place without the hassle and costs
associated with research and development. "Many of the pharmaceutical companies started producing

everything in-house out of their own R&D organizations and over time they've failed to produce
enough that way. So the industry is now coalescing around a 50-50 model of half on your own
and half bought in. There are some things we'll do for ourselves but we need to be constantly on
the lookout for new technologies," said Angus Russell, Chief Executive of Shire PLC. Five Star Equities releases regular
market updates on companies in the Biotech Industry so investors can stay ahead of the crowd and make the best investment
decisions to maximize their returns.

AT: Consumer Spending

High consumer spending leads to lower economic growth-crowds out investment
spending
Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
What's wrong with a consumer-driven economy? In a pure accounting sense, an additional dollar of consumer expenditure increases
GDP just as much as an additional dollar of business investment or exports. So what's wrong with a 70 percent share of consumer
spending in GDP? There are both theoretical reasons and empirical evidence that suggest U.S. long-

term growth prospects may have been harmed by the consumer boom that played out in the
decades before the crash. Standard economic-growth theory suggests that an economy must continuously invest in new
capital goods and structures in order to grow, become more productive and raise citizens' living standards over time. Empirical
evidence confirms the prediction that economies that invest a higher share of their incomes (or
that have access to relatively inexpensive investment goods, which presumably results in more
investment) tend to grow at faster rates.2 If consumer spending "crowds out" investment
spending, the economy may not grow as fast. Indeed, during our own economic history, higher
investment generally has been associated with lower consumer spending, and vice versa, where
both are measured as shares of GDP. This is at least circumstantial evidence of some crowding out going in one
direction or the other. During the period 1951-2010, consumer spending generally was lower than its average in years in which
investment was higher than its average; and consumer spending generally was lower than average when investment was higher than
average.3 Moreover, just as in cross-country studies, higher investment spending has been

associated with higher economic growth, while years of relatively high consumer spending have
been associated with relatively low economic growth in the U.S. This is true whether we look at
long or short periods of years considered individually or decade-long averages, as shown in
tables 2 and 3.

5 more warrants:
A. Lowers wealth

Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
Lower wealth. First and foremost, U.S. household wealth took a beating during the Great
Recession. The inflation-adjusted average wealth of an American citizen, which plateaued at
about $210,000 during the first half of 2007, remained about 24 percent lower on Sept. 30, 2011
($160,000), despite having rebounded from the depressed level of the first quarter of 2009
($152,000; all figures are expressed in terms of 2005 dollars).4 Many lower- and middle-income
households are feeling especially strong balance-sheet pressure as house pricesrepresenting
their principal asset in many casescontinue to weaken even as stock-market values
overwhelmingly owned by high-income householdshave recovered some of their losses.
Negative equitya situation in which a household's mortgage debt exceeds the market value of
the housenow affects between 22 and 29 percent of all households with mortgages, according
to various estimates.5 In sum, the loss of significant amounts of wealth and the severe pressure
in some households to deleverage their balance sheets (reduce debt) are likely to contribute to
restrained consumer spending for some time

B. Stagnant incomes

Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
Stagnant incomes. The economic recovery under way since mid-2009 has been mediocre, at
best. Job growth barely matches population growth, while incomes of the typical worker are
barely keeping up with inflation. Average weekly earnings, after inflation adjustment, for a
private-sector worker increased just 12 cents, or 0.03 percentfrom $350.80 to $350.92
during the five years through October 2011.6 Continuing a trend in evidence even before the
recession, most of the overall gains in income appear to be flowing to high-income workers .

C. Tight credit

Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
Tight credit. Consumer lenders either have disappeared altogether or are offering credit on a
much more restricted basis than before the downturn. By all accounts, mortgage credit is less
available to all but the strongest borrowers than was the case just a few years ago. Even
borrowers with high credit scores need substantial equity in order to borrow for house purchase
or mortgage refinancing. According to Federal Reserve surveys of banks' lending officers, credit
standards for nonmortgage consumer loans have begun to loosen only since 2010, after
tightening for about four years.7 Credit standards for mortgage loans have not loosened
significantly, after having been tightened sharply between 2006 and 2010.

D. Fragile Confidence

Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
Fragile confidence. Major consumer-confidence indexes have rebounded from their lowest levels
during 2009 in the immediate aftermath of the recession, but they remain below the levels that
prevailed just as the recession began in late 2007.8 Inflation-adjusted per-capita consumption
expenditures grew at a 2.4-percent annualized rate during the decade ending in December 2007,
but have grown at only a 1.4-percent annualized rate in the 28 months since the recession ended
(June 2009 through October 2011).

E. Looming reversal of stimulus

Emmons 12 (By William R. Emmons Assistant Vice President and Economist Federal Reserve
Bank of St. Louis The Regional Economist | January 2012 Don't Expect Consumer Spending To
Be the Engine of Economic Growth It Once Was
http://www.stlouisfed.org/publications/re/articles/?id=2201)
Looming reversal of stimulus. Unprecedented doses of monetary- and fiscal-policy stimulus
since the recession began partly offset the contractionary forces on consumer spending noted
above. Government support for consumer spending on this scale is not feasible indefinitely,
however. The Federal Reserve has explored options to "exit" its extraordinarily accommodative

monetary policy, while Congress and the president agree that budget consolidation is necessary
in the not-too-distant future. In both cases, a tightening of policy measures represents a
withdrawal of support for household incomes and wealth and, therefore, consumer spending.

AT: Competitiveness
Economies among nations arent zero-sum competitiveness theory
is a flawed metric for evaluating macro-economic trends

Wilson 08 (James Wilson, Basque Inst. of Competitiveness 8 Territorial Competitiveness and

Development Policy http://www.tips.org.za/files/Wilson_James_Paper.pdf p. 7)
Three central inter-related issues are evident in the dominant, yet contested, policy discourse on
competitiveness. First of all, there is discomfort among many with the explicit notion of
territories winning or losing associated with the language of competitiveness; secondly, there
is a fundamental question regarding what objectives places are actually trying to attain in their
quest to be competitive; thirdly, there must follow a concern with how (and by who) these
objectives are determined. Schoenberger (1998) provides an interesting departure point for the
first of these. She argues that the competitiveness discourse has two sources from which it takes
its power. Firstly, it is rooted in orthodox economics, in which the market ultimately judges
behaviour; thus competitiveness simply describes the result of responding correctly to market
signals (3), and becomes inescapably associated with ideas of fitness and unfitness ...
deserving to live and deserving to die (4). Secondly, it is rooted in the business community.
Here the term competitiveness is an essential value and an essential validation (4), used as an
explanation for any strategic action, without which the firm will lose out to competitors and
ultimately die. Thus competitiveness is deeply rooted in a dialogue of success and failure,
existence and extinction, and by implication direct win-lose competition. This explains in part
the concerns of authors such as Krugman, where critique of analysis of national competitiveness
is founded on the argument that trade is not a zero-sum game. 13 In this context an
obsession with winning in a process of direct competition carries a risk of over-encouraging
often ill-informed protectionist or strategic trade policies in a form of mercantilism. Alongside is
a suggestion that the language is inappropriate because countries cannot go out of business;
they dont suffer the ultimate sanction of extinction if they lose. However, while the theoretical
basis for these arguments may be sound in terms of a macroeconomic analysis of national trade,
Camagni (2002) suggests that they cannot be extended to the regional level of analysis. He
points to ongoing debate among regional scientists in response to Krugmans comments, and
argues that a key difference is that cities and regions compete on the basis of absolute advantage
rather than comparative advantage. The absence of effective automatic adjustment mechanisms
in the form of price-wage flexibility and exchange rates, alongside the existence of the more
effective and punishing mechanism of the inter-regional migration of capital and labour,
implies that a region can well be pushed out of business if the efficiency of all its sectors are
lower than those of other regions (Camagni: 2401-2402).14 While physically ceasing to exist is
obviously not a possibility, these features of regional economic interaction mean that regions in
effect risk long-term decline and exclusion if they cannot compete directly with others.

Competitiveness theory wrong offers a poor framework for

policymakers to follow

Wilson 08 (James Wilson, Basque Inst. of Competitiveness 8 Territorial Competitiveness

and Development Policy http://www.tips.org.za/files/Wilson_James_Paper.pdf p. 7)
Use of the concept of competitiveness in economic policy circles has subsequently seen an
explosion, with Porters framework developed with respect to smaller geographical units of
analysis, including cities and regions (Porter, 1995, 2003). Moreover, given its origins, the
popularity of the discourse of competitiveness has encouraged a stress on direct rivalry between

territories in economic development processes (Malecki, 2004). Thus Fagerberg (1996, 48,
emphasis added) suggests that a consensus definition of international competitiveness might
perhaps be that it reflects the ability of a country to secure a high standard of living for its
citizens, relative to the citizens of other countries, now and in the future. Furthermore, Bristow
(2005: 287) argues that along with other prominent commentators such as Robert Reich and
Lester Thurow, Porter has made a powerful contribution to the sedimentation of the idea that
places are equivalent to corporations, competing for market share within an increasingly
interconnected and fiercely competitive global economy. More generally such a perspective has
strong links with aspects of the debate surrounding the changing role of the State as processes of
globalisation have accelerated (Radice, 2000; Sugden and Wilson, 2005). Authors such as
Ohmae (1995), Storper (1997) and Scott (1998), for example, have been influential in
emphasising regions as basic economic units in an increasingly globalised world, and trends in
globalisation have helped fuel a burgeoning literature in regional studies.10 Within these
debates the concept of territorial competitiveness continues to play a pivotal, though contested,
role. While analysis of territorial competitiveness has proved extremely attractive for many
policy analysts and practitioners, reflected for example in wide adoption of the terminology and
core principles of Porters approach, it has raised concerns in different parts of the academic
literature. In general the variability in quality of analyses is noted: serious analyses as well as
ideological tracts, low-level business school reports, banal data churning, applications of
impressive but vacuous formulae, and straightforward bashing-the-foreigner (Lall, 2001a: 2).
More specifically, criticism has been aimed directly at Porters framework and its impacts on
policy. Davies and Ellis (2000), for example, review various critiques in identifying a series of
specific weaknesses and suggest that policy-makers are left with a laundry list on which to
base simple SWOT-type analyses of their economies, but there is no reliable guide to policy.
Reflective of the distance between the economics and business literatures, Lall (2001a: 5) makes
a more general point on business school approaches that transpose corporate strategy to the
national level: they often describe what they regard as the (sensible) constituent elements of
competitive success (innovation, skills, clusters) without grounding it in theories of markets,
market failures and the ability of government to overcome these failures. Finally, the use of a
concept of competitiveness itself has been attacked, criticisms ranging from it being ambiguous
due to lack of rigorous definition in the early economics literature (Siggel, 2006), to it being
fundamentally misguided and damaging (Krugman, 1994). Krugmans (1994, 1996,
1998) damning dismissal has been particularly widely cited. However, his strongly-worded call
to recognise that the obsession with competitiveness is both wrong and dangerous (1994: 44)
has neither stemmed the flow of analysis nor put an end to the controversy over its meaning and
use. Schoenberger (1998: 3) has since argued that competitiveness has become truly hegemonic
in the Gramscian sense. In line with some of Krugmans concerns over the misuse of the
concept, she questions whether we can be sure that the desired objectivity of our research is not
subtly undermined by our reliance on a language and a discourse that is not entirely of our own
choosing and, arguably, is a language and a discourse that represents the interests of particular
social groups and not others? (ibid.: 13). Such apprehension is echoed by Bristow (2005) in a
consideration of regional competitiveness. In particular, she argues that policy acceptance of
the existence and importance of regional competitiveness and its measurement appears to have
run ahead of a number of fundamental theoretical and empirical questions (286). Thus, our
theoretical understanding of what is meant by competitiveness at a regional scale lags behind its
emergence as a discrete and important policy goal and the associated proliferation of
indicators by which policy-makers and practitioners can measure, analyse and compare relative
competitive performance (ibid.: 286).11

The term competiveness is surrounded in misconceptions

discredit their authors baseless economic claims

Krugman 96(Paul R. Krugman, professor of economics at MIT, 1996, MAKING SENSE OF

THE COMPETITIVENESS DEBATE, OXFORD REVIEW OF ECONOMIC POLICY, VOL. 12,
NO. 3)
When it comes to international economics, however, nothing could be further from the truth.
Debates about international trade are a study in confusion and misconceptions, in which the
experts you see, hear, and read are usually misinformed about the most basic facts and
conceptsand in which even those who are fairly sound on the economics do not understand the
nature of the debate. The discussion of competitiveness is a case in point. The idea that
the economic success of a country depends on its international competitiveness took hold
among business, political, and intellectual leaders in the late 1970s. The World Economic
Forum, which hosts the famous Davos conferences, began issuing its annual World
Competitiveness Report in 1980, and the rankings in that report soon became a major criterion
by which national performance was judged. By the 1990s the concept of competitiveness was no
longer even controversial among influential people. Of course competitiveness was the key; the
only question was how to achieve it. But what does national economic competitiveness mean?
For the great majority of those who use the term, it means exactly what it seems to mean: it is
the view that nations compete for world markets in the same way that corporations do, that a
nation which fails to match other nations in productivity or technology will face the same kind of
crisis as a company that cannot match the costs or products of its rivals. This is the view
expressed, for example, in Lester Thurows 1992 book, Head to Head, which repeatedly asserts
that advanced nations are in a win lose competition for world markets. (Thurows book not
only was a massive best-seller but was approvingly cited by no less a figure than President
Clinton.) It is also the view expressed in the European Commissions 1993 White Paper, Growth,
Competitiveness, Employment, whose introduction argued that competition from newly
industrializing economies was the most important reason for the upward trend in European
unemployment rates. While influential people have used the word competitiveness to mean
that countries compete just like companies, professional economists know very well that this is a
poor metaphor. In fact, it is a view of the world so much in conflict with what even the most
basic international trade theory tells us that economists have by and large simply failed to
comprehend that this is what the seemingly sophisticated people who talk about
competitiveness have in mind. To the extent that they even notice that most people who matter
think that competitiveness is what economics is all about, economists imagine that the word
must mean something other than what it seems to mean. Either they suppose that
competitiveness is a poetic way of saying productivity, and has nothing to do with any actual
conflict between countries; or they suppose that people who talk about competitiveness must
understand the basics and have in mind some sophisticated departure from standard economic
models, involving imperfect competition, external economies, or both. And the flip side of this
misunderstanding is that those relatively few believers in the importance of competitiveness
who do know that their view conflicts with simple trade theory are unintentionally given aid and
comfort by economists who seem to be telling them that they have not failed to understand the
simple economics, but rather have transcended it.

Other world markets dont determine ours competitiveness theory

has no basis and results in poor economic policies
Krugman 94(Paul R. Krugman, professor of economics at MIT, Mar. - Apr., 1994,
Competitiveness: A Dangerous Obsession, Foreign Affairs, Vol. 73, No. 2, pp. 28-44)

Unfortunately, his diagnosis was deeply misleading as a guide to what ails Europe, and similar
diagnoses in the United States are equally misleading. The idea that a country's economic
fortunes are largely determined by its success on world markets is a hypothesis, not a necessary
truth; and as a practical, empirical matter, that hypothesis is flatly wrong. That is, it is simply
not the case that the world's leading nations are to any important degree in economic
competition with each other, or that any of their major economic problems can be attributed to
failures to compete on world markets. The growing obsession in most advanced nations with
international competitiveness should be seen, not as a well-founded concern, but as a view held
in the face of overwhelming contrary evidence. And yet it is clearly a view that people very much
want to hold a desire to believe that is reflected in a remarkable tendency of those who preach
the doctrine of competitiveness to support their case with careless, flawed arithmetic. This
article makes three points. First, it argues that concerns about competitiveness are, as an
empirical matter, almost completely unfounded. Second, it tries to explain why defining the
economic problem as one of international competition is nonetheless so attractive to so many
people. Finally, it argues that the obsession with competitiveness is not only wrong but
dangerous, skewing domestic policies and threatening the international economic system. This
last issue is, of course, the most consequential from the standpoint of public policy. Thinking in
terms of competitiveness leads, directly and indirectly, to bad economic policies on a wide range
of issues, domestic and foreign, whether it be in health care or trade.

The analogy between corporations and countries is flawed reject

competitiveness theory

Krugman 94(Paul R. Krugman, professor of economics at MIT, Mar. - Apr., 1994,

Competitiveness: A Dangerous Obsession, Foreign Affairs, Vol. 73, No. 2, pp. 28-44)
Most people who use the term "competitiveness" do so without a second thought. It seems
obvious to them that the analogy between a country and a corporation is reasonable and that to
ask whether the United States is competitive in the world market is no different in principle
from asking whether General Motors is competitive in North American minivan market. In fact,
however, trying to define the competitiveness of a nation is much more problematic than
defining that of a corporation. The bottom line for a corporation weakness is literally its bottom
line: if a corporation cannot afford to pay its workers, suppliers, and bondholders, it will go out
of business. So when we say that a corporation is uncompetitive, we mean that its market
position is unsustainable that unless it improves its performance, it will cease to exist.
Countries, on the other hand, do not go out of business. They may be happy or
unhappy with their economic performance, but they have no well-defined bottom line. As a
result, the concept of national competitiveness is elusive. One might suppose, naively, that the
bottom line of a national economy is simply its trade balance, that competitiveness can be
measured by the ability of a country to sell more abroad than it buys. But in both theory and
practice a trade surplus may be a sign of national weakness, a deficit a sign of strength. For
example, Mexico was forced to run huge trade surpluses in the 1980s in order to pay the interest
on its foreign debt since international investors refused to lend it any more money; it began to
run large trade deficits after 1990 as foreign investors recovered confidence and began to pour
in new funds. Would anyone want to describe Mexico as a highly competitive nation during the
debt crisis era or describe what has happened since 1990 as a loss in competitiveness? Most
writers who worry about the issue at all have therefore tried to define competitiveness as the
combination of favorable trade performance and something else. In particular, the most popular
definition of competitiveness nowadays runs along the lines of the one given in Council of
Economic Advisors Chairman Laura D'Andrea Tysons Who's Bashing Whom?: competitiveness
is "our ability to produce goods and services that meet the test of international competition
while our citizens enjoy a standard of living that is both rising and unsustainable." This sounds

reasonable. If you think about it, however, and test your thoughts against the facts, you will find
out that there is much less to this definition than meets the eye. Consider, for a moment, what
the definition would mean for an economy that conducted very little international trade, like the
United States in the 1950s. For such an economy, the ability to balance its trade is mostly a
matter of getting the exchange rate right. But because trade is such a small factor in the
economy, the level of the exchange rate is a minor influence on the standard of living. So in an
economy with very little international trade, the growth in living standards and thus
"competitiveness" according to Tyson's definition would be determined almost entirely by
domestic factors, primarily the rate of productivity growth. That's domestic productivity growth,
period not productivity growth relative to other countries. In other words, for an economy with
very little international trade, "competitiveness" would turn out to be a funny way of saying
"productivity" and would have nothing to do with international competition.

Competetiveness theory is dictated by careless arithmetic that shows

little correlation to the economy

Krugman 94(Paul R. Krugman, professor of economics at MIT, Mar. - Apr., 1994,

Competitiveness: A Dangerous Obsession, Foreign Affairs, Vol. 73, No. 2, pp. 28-44)
One of the remarkable, startling features of the vast literature on competitiveness is the repeated
tendency of highly intelligent authors to engage in what may perhaps most tactfully be described
as "careless arithmetic." Assertions are made that sound like quantifiable pronouncements
about measurable magnitudes, but the writers do not actually present any data on these
magnitudes and thus fail to notice that the actual numbers contradict their
assertions . Or data are presented that are supposed to support an assertion, but the writer
fails to notice that his own numbers imply that what he is saying cannot be true. Over and over
again one finds books and articles on competitiveness that seem to the unwary reader to be full
of convincing evidence but that strike anyone familiar with the data as strangely, almost eerily
inept in their handling of the numbers. Some examples can best illustrate this point. Here are
three cases of careless arithmetic, each of some interest in its own right. Trade Deficits and the
Loss of Good jobs. In a recent article published in Japan, Lester Thurow explained to his
audience the importance of reducing the Japanese trade surplus with the United States. U.S.
real wages, he pointed out, had fallen six percent during the Reagan and Bush years, and the
reason was that trade deficits in manufactured goods had forced workers out of high-paying
manufacturing jobs into much lower-paying service jobs. This is not an original view; it is very
widely held. But Thurow was more concrete than most people, giving actual numbers for the job
and wage loss. A million manufacturing jobs have been lost because of the deficit, he asserted,
and manufacturing jobs pay 30 percent more than service jobs. Both numbers are dubious. The
million-job number is too high, and the 30 percent wage differential between manufacturing
and services is primarily due to a difference in the length of the workweek, not a difference in
the hourly wage rate. But let's grant Thurow his numbers. Do they tell the story he suggests? The
key point is that total U.S. employment is well over 100 million workers. Suppose that a million
workers were forced from manufacturing into services and as a result lost the 30 percent
manufacturing wage premium. Since these workers are less than 1 percent of the U.S. labor
force, this would reduce the average U.S. wage rate by less than 1/100 of 30 percent that is, by
less than 0.3 percent . This is too small to explain the 6 percent real wage decline by a
factor of 20. Or to look at it another way, the annual wage loss from deficit induced
deindustrialization, which Thurow clearly implies is at the heart of U.S. economic difficulties, is
on the basis of his own numbers roughly equal to what the U.S. spends on health care every
week.

Competitiveness theory wrong multiple warrants

Camgani 1(Roberto Camagni, Department of Management, Economics and Industrial

Engineering of Milano Italy, July 2001,On the Concept of Territorial Competitiveness: Sound
or Misleading?, Urban Studies, Vol. 39, No. 13)
Krugmans provocative view is widely known. He contests the growing obsession with
international competitiveness, denying, on both theoretical and empirical grounds, that a
countrys economic fortunes are largely determined by its success on world markets (Krugman,
1998, p. 5). He holds that Countries do not compete with each other the way corporations
do; they do not go out of business (Krugman, 1998, p. 6). While they sell products that
compete with each other, [they] are also each others main export markets and each others main
supplier of useful imports (p. 9). The main role of exports is to provide the means to pay for
imports, which represent the true element that enhances local wellbeing as it allows the
availability of goods at lower prices with respect to local production. Following Ricardos
textbook model in international trade theory, a country will always find a range of goods in
which it has a comparative advantage, even if there are no goods in which it has an absolute
advantage (Krugman, 1998, p. 91). Therefore, he argues, not only is the competitiveness
goal blatanatly wrong , but it is also dangerously misleading as, whenever national
authorities try to intervene in affecting the competitive advantage of their territories, they end
up with a sort of neo-mercantilism, detrimental to the fair allocation of resources which should
be based on objective elements, neutrally evaluated by the market. The traditional infant
industry argument for justifying (temporary) protectionist policies and the more modern
strategic trade policies, which justify export subsidies and temporary tariffs in order to let
local industries create their own comparative advantage, through a process of positive feed
back, including increasing returns and external economies (technological and pecuniary)
(Krugman, 1998, pp. 9697), are considered and accepted, as parts themselves of Krugmans
recent contribution to the new trade theory, but with strong warning against overuse
(Krugman, 1998, p. 99).

AT: Business Confidence

Business confidence over exaggeratedsurveys are too subjective

Dickens 11 (Rodney Dickens Managing Director and Chief Research Officer Strategic Risk
Analysis Limited 29 April 2011 RODNEYS RAVINGS Putting the misleading business
confidence surveys in perspective http://sra.co.nz/pdf/BusinessConfidence.pdf)
Some economists and parts of the media continue to interpret the business confidence surveys
as if they provided good insights into near-term economic growth prospects. This includes using
the recent rebound in business confidence as a basis for encouraging the RBNZ to deliver earlier
rather than later OCR hikes. The problem is that the business confidence surveys have gone
AWOL. The economists in question are overlooking the fact that the business confidence surveys
do not have a stable relationship with economic growth. The business confidence surveys are at
times subject to major political bias that means it can be unwise to interpret them at face
value. At the moment the business confidence surveys are massively overstating near-term
economic growth prospects, which some economists are blindly overlooking. This Raving puts
the misleading business confidence surveys in the proper perspective and provides a hint about
near-term economic growth and interest rate prospects.

AT: Hegemony
Hegemony doesnt help the economy empirics prove

Drezner 06-10 (Daniel W. Drezner is Professor of International Politics at the Fletcher School
of Law and Diplomacy at Tufts University, Jul 10, 2013 ,Military Primacy Doesnt Pay (Nearly As
Much As You Think) http://www.mitpressjournals.org/doi/pdf/10.1162/ISEC_a_00124)
This article evaluates whether the economic beneits of military preeminence and deep
engagement are as great as proponents suggest. This evaluation begins by breaking down the
arguments that military primacy yields economic returns into the most commonly articulated
causal mechanisms. It then assesses what the scholarly literature and evidence can conclude about those causal mechanisms.
The three most plausible pathways are the geoeconomic favoritism that foreign capital inflows
provide for military super powers; the geopolitical favoritism gained from an outsized military
presence; and the public goods benefits that flow from hegemonic stability. Each of these arguments is
less empirically persuasive than is commonly ar ticulated in policy circles. There is little evidence that military
primacy yields appreciable geoeconomic gains. The evidence for geopolitical favoritism is much
more robust during periods of bipolarity than it is under unipolarity, which suggests that
primacy in and of itself does not yield material trans fers . The evidence for public goods bene fits is strongest,
but military predomi nance plays a supporting role in that causal logic; it is only full-spectrum unipolaritya condition in which a
single actor is universally acknowledged to be the dominant actor across a variety of power dimensionsthat yields ap preciable
economic gains. The economic bene fits from military predominance alone seem, at a minimum, to have been exaggerated in policy
and scholarly circles. While there are economic benefits to possessing a great power military, diminishing marginal returns are
evident well before achieving military primacy. The principal bene fits that come with military primacy appear to flow only when
coupled with economic primacy. These findings have significant implications for theoretical debates

about the fungibility of military power, and should be considered when assessing U.S. fiscal
options and grand strategy for the coming decade. The articles first section frames the current
discourse about the economic bene fits of military primacy in the context of U.S. budgetary
debates. The second section evaluates the geoeconomic favoritism hypothesis. The third section considers the geopolitical
favoritism argument. The fourth section as sesses the public goods logic. The final section summarizes and
discusses the implications of the articles findings for international relations theory and U.S.
foreign policy.

Geoeconomics false history proves impacts are exagerated

Drezner 06-10 (Daniel W. Drezner is Professor of International Politics at the Fletcher School
of Law and Diplomacy at Tufts University, Jul 10, 2013 ,Military Primacy Doesnt Pay (Nearly As
Much As You Think) http://www.mitpressjournals.org/doi/pdf/10.1162/ISEC_a_00124)
The evidence for geoeconomic favoritism is mixed. To be sure, some measure of military power is generally
acknowledged to be a prerequisite for developing a reserve currency. 26 There has been a powerful correlation between states with
signi ficant amounts of military power and economic wealth. 27 Since the beginning of the modern Westphalian state system,
leaders have equated military power with economic plenty. 28 The direction of causality in this relationship is

much more dif ficult to ascertain, however. It is possible that military power generates greater economic bene fits,
but most researchers draw the opposite conclusion: the primary causal arrow moves from economic vital ity
toward a strong military. This was Kennedys conclusion in The Rise and Fall of the Great Powers , matching the general
consensus of most scholars who work on hegemonic stability, power transition, or long cycles. 29 Realists such as Barry Posen
have reached a similar conclusion: If the United States were not the dominant economic and
technological power, it would not be the domi nant military power. 30 For the causal logic of geoeconomic
favoritism to hold up, military power must generate concomitant economic gains rather than vice versa. There is modest evidence
for this assertion. At a base level, geoeconomic favoritism clearly exists. As a necessary condition, a states ability to defend its
borders determines its ability to develop its economy, capital markets, and regional economic ties. 31 Thus, military

capabilities can help to reduce political risk, which is a signi ficant explanatory factor for crossborder capital flows. 32 The necessary condition for this relationship is not military predominance, but some suf ficient level
of great power military capabilities. For geoeconomic fa voritism to occur, military primacy and deep engagement must generate

greater inflows of capital than would otherwise be the case. Carla Norrlofs work represents the most direct effort to test the
relationship between U.S. military prowess and financial strength. She argues, for example, that since 1979 funds have

more readily flowed to the United States when it has won its wars. 33 When the United States
has gotten bogged down in military quagmires, on the other hand, the reverse has been true.
Her evidence for testing this assertion, however, rests solely on an annual bivariate comparison
of U.S. military performance with financial flows into the United States. The failure to consider
other causal factors in determining the flow of fundssuch as economic growth, monetary
policy, or fiscal policy measuresintroduces signi ficant omitted variable bias into her analysis.
The historical literature does not lend much support to geoeconomic favorit ism. Jonathan Kirshners work
demonstrates that financial interests are con cerned with the minimization of risk. As part of
ensuring global order, military hegemons frequently need to exercise their military power; such
actions intro duce the possibility of macroeconomic instability into financial markets and
national economies. Kirshner shows that, historically, the financial sector has staunchly
opposed initiating the use of force in world politics. Even military hegemons must therefore be
wary of alienating global capital: [S]tates, he writes, must be alert to the fact that by choosing a more assertive or
ambi tious national security strateg y... they may be punished by international financial markets, principally via capital flight,
pressure on the exchange rate and greater dif ficulty in borrowing abroad. 34 At a minimum, this set of capital

market preferences implies that hegemons receive negligible geoeconomic bene fits from
military primacy. The behavior of reserve currencies between the two world wars is another data point against geoeconomic
favoritism. If this logic is valid, then military power should also be a principal factor in determining which state issues the reserve
currency. Both the United Kingdom in the nineteenth century and the United States after 1945 meet this criterion. Because these
states were also the largest economies and largest financial centers during those respective pe riods, however, the causal factors are
overdetermined. During the interwar period, however, there was a signi ficant disparity between the military capa bilities of Great
Britain and the United States; the former had far greater power projection capabilities than those of the latter. 35 On other
dimensionsmarket size, financial depththe United States and the United Kingdom were more evenly matched. Despite the
British military advantage, however, the most recent economic history on this subject shows that publicand private-sector actors
began treating the dollar as a reserve currency as early as the mid-1920s. 36 Economic and financial factors, not the

military balance of power, primarily determine the location of the reserve currency . The recent
economics literature on the causes of national financial strength further downplays the role of military power and favors that of
domestic political institutions. While both democratic and authoritarian great powers have possessed large military establishments,

this literature concludes that inclu sive, democratic political institutions play the crucial role in
allowing large states to exploit their financial power. Because these institutions can allow po
litical leaders to credibly commit, states housing such institutions are per ceived as more likely
to honor their debts. 37 States with large militaries are also more vulnerable to the development
of extractive political institutions: polit ically powerful actors can exploit the coercive apparatus of a large military to
develop political institutions that reward members of the selectorate with private goods, rather than the public goods necessary to
attract inward capi tal flows. 38 History suggests that absolutist leaders with large militaries have been far more likely to repudiate
their debts. 39 As Daron Acemo j lu and James Robinson have demonstrated, countries based on extractive political institu tions are
more likely to possess comparatively more sclerotic economies. 40 For any national government, some degree of

defense spending and military prowess reassures private-sector actors that their investments
will be secure. Beyond that base level, however, all of the literature indicates that primacy yields
little in the way of geoeconomic returns. Security is certainly a necessary condition for attracting foreign capital
inflows, but predominance does not appear to be a prerequisite. If anything, an outsized military, by loosening
constraints on the state to refrain from military adventurism, retards rather than enhances
inward private capital flows.

Hegemony does not facilitate the exchange of goods conflicts of

interest

Drezner 06-10 (Daniel W. Drezner is Professor of International Politics at the Fletcher School
of Law and Diplomacy at Tufts University, Jul 10, 2013 ,Military Primacy Doesnt Pay (Nearly As
Much As You Think) http://www.mitpressjournals.org/doi/pdf/10.1162/ISEC_a_00124)
The final and most signi ficant argument for how military primacy translates into economic
bene fits is that primacy facilitates the creation of global public goods . Beginning with Charles
Kindleberger, a wide range of international relations theorists have posited that a liberal hegemon is a necessary and suf ficient

condition for the creation of an open global economic order. 67 In

a uni polar system, as John Ikenberry notes,

the lone superpower provides some array of public goods in exchange for the cooperation of
other states. 68 The greater economic growth and dynamism produced by the free exchange of goods, services, and capital
across borders rewards all the actors in the sys tem. Hegemonic stability theorists, however, stress that the hegemon can shape the
rules of the economic game in its favor; while everyone gains from the arrangement, the hegemon, as the largest actor and the one
that shapes the rules, gains in particular. 69 As the provider of the global reserve currency, for example, the United States can
borrow at lower interest rates and collect reve nues from seigniorage. 70 The Peterson Institute for International Economics
estimates that the post-1945 opening of the global trading order adds $1 trillion to the U.S. gross domestic product annually. 71
Theorists working in the hegemonic stability tradition tend to focus on measures of economic power. Kindlebergers public goods
argument, for example, emphasized the provision of liquidity and the provision of a large market for distressed goods. The role of
military power is still usually acknowledged as providing critical security goods. 72 One example of this role would be

providing the ultimate means of enforcing the rules of the game. 73 A more concrete example
would be ensuring free navigation of the seas for international commerce. Maintaining the safety of
cross-border exchange is a necessary compo nent of boosting trade and investment. Former U.S. Chief of Naval Operations Gary
Roughead has said, So much of what moves on the world today in trade and commerce and the resources that flow moves on the
oceans. About 90 per cent of everything that moves, moves on the oceans. So how we protect the sea-lanes, how con fident we are
that goods can move from one point to the other and not be interfered with is extremely important. 74 Because of the concentration
of oil in zones of political instability, such as the Persian Gulf, protecting energy flows would seem to be an especially useful function
of military power. Scholars working in power transition and long cycle traditions have arrived at similar conclusions about the bene
fits of military primacy. All of these scholarly traditions focus, in particular, on the security bene fits from a concen tration of
military capabilities. Each posits that the presence of a military he gemon reduces the likelihood of arms races, wars, and security
rivalries. For power transition theorists such as A.F.K. Organski, international order is at its most stable when there is a single
leading state and all actors accept the given distribution of power and wealth an d... abide by the same rules. 75 Similarly, George
Modelski and other long cycle theorists argue that stability is maximized within that cycle when a new hegemon has developed a
decisive military and technological edge. 76 William Wohlforth has made the strongest theoretical argument for this position in the
postCold War era. He argues, contrary to balance of power theorists, that unipolarity is the most stable and peaceful of all possible
international systems: Unipolarity favors the absence of war among the great powers and comparatively low levels of competition
for prestige or security for two reasons: the leading states power advantage removes the problem of hegemonic rivalry from world
politics, and it reduces the salience and stakes of balance of power politics among the major states. 77 Wohlforth has ex panded on
this argument in later work, applying social identity theory to explain the durability and peaceful nature of unipolarity. 78 He and
Stephen Brooks further point out that balancing against a rising power is one thing, but balancing against an existing hegemon is
altogether different: Balance-ofpower theory predicts that states will try to prevent the rise of a

hegemon; it tells us nothing about what will happen once a country establishes such a posi
-tion. 79 Indeed, even realists such as John Mearsheimer and Randall Schweller have
acknowledged that balancing is less common than realism predicts. Mearsheimer posits that
this is because balancing is in and of itself a public good, and therefore buckpassing is more
likely. Schweller attributes under balancing to domestic political factors. 80 Regardless of the causal mechanism, all of these
international relations theo ries posit that once a military hegemon emerges, the world should be much more secure, peaceful, and
prosperous. With a preeminent military superpower, other states have less incentive to engage in arms races, brinkmanship, or secu
rity rivalries. Potential great power rivals do not see the utility of attempting to challenge the hegemon militarily. Smaller states
recognize that the bene fits of bandwagoning outweigh efforts to balance. As a result, both militarized dis putes and aggregate
defense expenditures should be expected to decline during eras of unipolarity, thus allocating more resources for economic growth,
which in turn creates a virtuous circle of greater growth and greater peace. The empirical evidence for this causal mechanism is
stronger than for the mechanisms previously discussed in this article, although there are signi ficant quali fiers. On one hand,

the literature rejects the notion that hegemony is a necessary condition for an open global
economy. 81 Indeed, the existence of a liberal hegemon alone is not a suf ficient condition;
supporter states also play a crucial role in the spread of economic openness . 82 Although the precise
causal mechanisms remain disputed, hegemonic eras are nevertheless strongly correlated with lower trade
barriers and greater levels of globalization. 83 Furthermore, direct evidence exists that the exercise of military power
to protect sea-lanes boosts global trade flows (though the magnitude of the effect is disputed). The presence of naval forces during
times of militarized disputes has reduced market expectations of supply disruptions. 84 It could be argued, however, that concerns
about energy disruptions have been overstated; even in instances when U.S. military intervention was absent, world oil markets have
rapidly adjusted to price spikes. 85 A similar story can be told when ana lyzing the naval reaction to the post-2008 surge in Somali
piracy. Attacks spiked after the financial crisis and peaked in 2011. Attacks remain at an ele vated level after peaking in 2011, but
their success rate has fallen markedly. Between 2011 and 2012, the number of successful global piracy attacks de clined by 67
percent. The presence of multinational naval patrolsincluding the U.S. Navyin the most

vulnerable sea-lanes has helped matters, but the improved private security on board the
commercial tankers appears to have helped even more. 86 The historical evidence further
suggests that global and regional systems with a sole superpower have lower levels of arms races
and violent conflict. In one empirical review of the literature, Daniel Geller concluded, The only polar structure that appears
to influence conflict probability is unipolarity. 87 Examinations of pre-Westphalian regional systems also support this finding. 88
For example, the East Asia region had a clear hegemon in China from the start of the Ming dynasty to the peak of the Manchu

dynasty. The result was a period of remarkable political stability. Countries in the region refrained from attacking China and each
other; Beijing refrained from converting its hegemony into an expanding empire. 89 Except for moments of Chinese stagnation, war
was extremely rare during this period; indeed, it was so rare that some Chinese international relations scholars now extol this tianxia
era as a model for the future of global order. 90 The postCold War era offers further evidence for reduced security rivalries and
greater stability in a hegemonic world order. The Human Security Project has tracked violent conflict in the post-1945 period, and its
data are incontro vertible: there has been a marked and secular decline in interstate violence since the end of the Cold War, and a
further decline in other forms of vio lence, such as civil war and extrajudicial killings. 91 Consistent with the logic of unipolarity,
global military expenditures have declined dramatically following the end of the Cold War. Global expenditures on defense as a
percentage of global output averaged 5.1 percent between 1972 and 1990. Over the last dec ade, despite the global war on terror,
defense expenditures as a percentage of global output have averaged only 2.5 percent. 92 The peace dividend from the shift to
unipolarity has been signi ficant. Military primacy alone is not the sole cause of this decline. A growing body of work suggests that
the postCold War decline is merely the continuation of a long-term secular trend toward less violence. 93 Still, even scholars
advancing this long-term argument acknowledge the role that U.S. military hegemony plays. Joshua Goldstein, for example,
attributes part of the decline in violent conflict to the end of the cold war, and to a unipolar world order with a single superpower to
impose its will in places like Kuwait, Serbia, and Afghanistan .... [A] unipolar world is inherently more peaceful than the bipolar one
where two superpowers fueled rival armies around the world. 94 There are two signi ficant caveats to this body of evidence,
however. The first reservation is that in all of these theorieshegemonic stability, power transition, long cycleeventually the cost
of maintaining global public goods catches up to the sole superpower. Other countries free-ride off of the hege mon, allowing them
to grow faster. Technologies diffuse from the hegemonic power to the rest of the world, facilitating catch-up. Chinese analysts have
pos ited that these phenomena, occurring right now, are allowing China to outgrow the United States. 95 The absence of burden
sharing is particularly acute on the military side of the public goods equation. Eugene Gholz and Daryl Press argue that the costs of a
forward military presence outweigh the gains accruing to the United States from global stability. 96 Nuno Monteiro observes that
the United States has been at war in thirteen of the twenty-two postCold War yearsa marked contrast to pre-1989 levels. 97

These military operations might have prevented wider wars from breaking out, but the United
States continues to pay the price in blood and treasure. The costs of the Iraq and Afghanistan
operations have exacted a signi ficant toll on Americas fiscal healthmore than $3 trillion to
date, with an estimated $4 trillion to $6 trillion total projected for both conflicts. 98 The second
caveat is whether military power alone is the primary driver for the public goods bene fits of
unipolarity. Most scholars who attempt to determine the presence of unipolarity do not rely
solely on military measures to make that assertion. The literature on measuring state power
relies on multiple metrics. Joseph Nye has repeatedly referred to power in world politics as a
three-dimensional chessboard that comprises military, economic, and soft power
dimensions. Scholars who debate the persistence of American unipolarity include, at a
minimum, both economic and military measures of power. 99 Hegemony relies on multiple
channels of power. This matters because the primary causal mechanism that leads to peace and prosperity through
unipolarity is the elimination of uncertainty. 100 When hegemony is uncontested and acknowledged by all
major actors, then secondary states have less need to attempt to balance or to engage in statusseeking behavior. Indeed, even schol ars who argue for the persistence of unipolarity acknowledge the importance of

preeminence across a variety of power metrics. Wohlforth notes: The theory suggests that it is not just the aggregate distribution of
capabilities that matters for status competition but also the evenness with which key dimensionssuch as naval, military, economic,
and technologicalare distrib -ed. Uneven capability portfolioswhen states excel in different relevant ma terial dimensionsmake
status inconsistency more likely. When an actor possesses some attributes of high status but not others, uncertainty and status
inconsistency are likely. The more a lower-ranked actor matches the higherranked group in some but not all key material
dimensions of status, the more likely it is to conceive an interest in contesting its rank and the more likely the higher-ranked state is
to resist. 101 If Wohlforths logic is accurate, then military power alone does not explain the reduction of conflict or security rivalries
in the postCold War era. It is the combination of military and economic supremacy that leads to peace and pros perity. For

unipolarity to yield positive economic bene fits through systemic stability, it must be fullspectrum unipolarity. This observation is problematic for the present and the future. As
previously noted, there is a broad-based consensus that the military primacy of the United
States will remain uncontested for the next decade at least; indeed, even extrapolating current
trends, it is far from clear whether Chinese military spending will catch up with that of the
United States in the next generation. 102 U.S. economic primacy is another matter entirely. Multiple privateand
publicsector estimates suggest that China will overtake the United States within the next decade.
The International Monetary Fund (IMF) projects that Chinas gross domestic product will
overtake U.S. gross domestic product, as measured using purchasing power parity, by the year
2016. At least one estimate posits that China has already overtaken the U.S. economy in terms of
purchas ing power parity. 103 China has been increasingly willing to use its economic power to
influence its near neighbors, such as withholding rare earth exports to Japan after it seized a
Chinese fishing boat captain in disputed territorial waters. 104 It has also attempted to use its
economic power to influence U.S. economic policy. 105 Chinas economic rise has reintroduced uncertainty into

assessments about the global distribution of power. This perceptual gap is revealed in the dif ferent national responses to the April
2012 Pew Global Attitudes survey. When asked to name the worlds leading economic power, only Turkey and Mexico had
majorities of respondents name the United States. On the other hand, in five of the original Group of Seven economies, strong
majorities or pluralities named China as the worlds leading economic power. In other words, an increasing proportion of the
developed and developing world thinks that economic primacy has shifted to China. One could argue that elite policymakers are
immune from mass misperceptions; U.S. policymaking elites interpret Chinas rise differently. 107 Nevertheless, both public rhetoric
and pri vate diplomatic discourse suggest that U.S. policymakers share this view of Chinas new economic status with the global
public. 108 This perception is wrong. By any objective assessment, the United States re mains the worlds

largest and most powerful economy; it is also more appro priate to measure economic power
using market exchange rates rather than purchasing power parity. 109 Furthermore, there are
excellent reasons to doubt the straight-line extrapolation of Chinas economic ascent. 110 Still,
according to Wohlforths logic, the shift in perceptions alone should lead to increases in status-seeking behavior by China. And,
indeed, this argument parsimoniously explains the Sino-American relationship since the start of 2009. 111 In the aftermath of the
2008 financial crisis, China challenged the security status quo. In early 2009, Chinese ships engaged in multiple skirmishes with
U.S. surveillance vessels in an effort to hinder American naval intelligence-gathering efforts. 112 Beijing responded angrily and
forcefully to the awarding of the 2010 Nobel Peace Prize to Chinese activist Liu Xiaobo. China reacted to routine U.S. arms sales to
Taiwan with extremely hostile rhetoric and threats to sanction U.S. firms. China refused to condemn North Korea for the sinking on
the South Korean ship Cheonan , frustrating Japan and South Korea. In response to push back from the United States and the
Association of Southeast Asian Nations on the South China Sea at the 2010 ASEAN Regional Forum, Chinese Foreign Minister Yang
Jiechi responded angrily, bluntly lecturing other participants that China is a big country and other countries are small countries,
and thats just a fact. 113 The policy responses to Chinas post-2008 policy shifts have been particu larly interesting for the
argument that military primacy generates stability. On the American side, the fall of 2011 saw a widely reported pivot or re
balancing by the United States toward the Paci fic Rim that included a range of security-related statements and actions. 114 The
United States signed the ASEAN Treaty of Amity and Cooperation and began attending the East Asia Summit; Secretary of State
Hillary Clinton announced that the peaceful resolution of territorial disputes in the South China Sea to be in the U.S. national
interest; the State Department averred that the U.S. defense treaty with Japan covered the contested Senkaku/Diaoyu Islands; and
the U.S. Navy ramped up activity in the region and announced that a greater preponderance of naval assets would be allocated to the
Paci fic. Washington facilitated or enhanced security dialogues and military exercises with friends and partners in the region; five
hundred U.S. Marines were stationed in Darwin, Australia. In addition, the Obama administration fostered a diplomatic, economic,
and security opening with Myanmar, a longtime ally of China. Although there have been eco nomic components to the rebalancing
toward East Asia, the most prominent elements have been military. 115 Furthermore, most of Chinas neighbors warmly embraced
the U.S. pivot. If the public goods logic of military unipolarity held true, then these actions should have deterred China from further
aggressive actions. Yet, despite the flexing of U.S. military power, China did not ratchet down its behavior in the region. As Wu
Xinbo observed, [G]iven the comprehensive rise in its na tional power in recent years, China feels more con fident in confronting
the U.S. rebalancing strategy. 116 Indeed, if anything, Beijing increased its aggressive behavior. China ratcheted up tensions with
the Philippines over the Scarborough Shoal in the spring and summer of 2012. In the fall of 2012, it es calated tensions with Japan
over the latters claim of ownership of islands in the East China Sea. The pacifying effects of unipolarity appear to have dis sipated.
Instead, Chinese behavior is consistent with predictions of great power behavior under status uncertainty. Within the Chinese
policymaking and scholarly communities, there is a growing obsession with measuring and comparing Chinese power to U.S. power.
117 In one recent assessment, Wang Jisi summarized the worldview of the top Chinese leadership: The rise of China, with its sheer
size and very different political system, value system, cul ture, and race, must be regarded in the United States as the major
challenge to its superpower status. 118 Chinas assertiveness, particularly in the wake of U.S. efforts to display its military
preeminence, suggest that the causal logic through which primacy should lead to reduced security rivalries is eroding. Contrary to
neoconservative fears, the issue is not the waning of U.S. military power: both Chinese and U.S. military analysts acknowledge that
the United States military advantage is still impressive. Rather, uncertainty about U.S. economic strength feeds perceptions of
American decline. Following the logic of a unipolar system, this perceptual shift and uncertainty will lead to a revival of statusseeking behavior by China. Military supremacy on its own is insuf ficient to prevent the renewal of great power tensions in the world;
fullspectrum unipolarity is necessary. Without a suf ficient amount of economic power, the pacifying

effects of military supremacy will eventually erode.

AT: Manufacturing
Manufacturing not key to the economyinnovation is

Moretti 13 (Enrico Moretti Holds the Michael Peevey and Donald Vial Chair of Labor
economics at University of Berkeley The Costco Connection, June 2013 Are U.S. Manufacturing
Jobs Still Important to the Economy? www.costcoconnection.com/connection/201306?
pg=10#pg20)
Many pundits are predicting that the perceived renaissance of Americas manufacturing sector will restore blue-collar America to its
past glories. The reality is that while manufacturing employment increased modestly over the last

two years, it was only after 30 years of steep and consistent declines. American factories have
lost an average of 370,000 blue-collar positions per year since 1980. This decline is likely to
continue in the foreseeable future. The future of American jobs is not in manufacturing, it is in
innovation. Look where job creation is concentrated today. The economic map of America shows three different countries. At
one extreme are the countrys brain hubscities such as Seattle; Raleigh-Durham, North Carolina; Austin, Texas; and Bostonwith a
strong innovation- driven economy and a labor force among the most creative and best paid on the

planet. At the other extreme are cities once dominated by manufacturingDetroit; Flint,
Michigan; and Clevelandwith shrinking labor forces and salaries . In the middle is the rest of America,
apparently undecided on which direction to take. The difference between the three Americas was small in the 1980s but has been
growing dramatically since then. In 1980, the average salary in Austin was lower than in Flint. Today it

is
70 percent higher in Austin, and the gap keeps expanding with every passing year. The winners
and losers in this process are not always who you expect. The dynamism of Americas innovation
sector matters not just to scientists and software engineers. It matters to all of us. In my research, I find that
for each new innovation job in a city, five additional service jobs are created, in both professional occupations (lawyers, teachers,
doctors) and nonprofessional occupations (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San
Francisco, for example, there are five new job openings for baristas, personal trainers, therapists, nurses and taxi drivers in the
community. Remarkably, the most important effect of high-tech companies on the local economy is

outside high tech. Manufacturing also has a multiplier effect, but it is much smaller. This means
that the best way for a city or state to generate jobs for lessskilled workers is to attract innovative
companies that hire highly skilled ones. The average American worker will never be employed
by Apple or Google. But their jobs increasingly depend on innovation.

Manufacturing cant boost the economyout sourcing

Woodward 13 (Curt Woodward Journalist 2/28/13 MIT Report: U.S. Manufacturing Hits a
Wall When Its Time to Scale http://www.xconomy.com/boston/2013/02/28/mit-report-usmanufacturing-hits-a-wall-when-its-time-to-scale/)
Manufacturing isnt dead in the U.S. But when it comes time to pump out products on a large
scale, the pull of overseas economies and investors becomes too strong to resist. Thats one of
the conclusions from a group of MIT researchers tackling a wide-ranging study of the American
production economy. Their report aims to give a broad picture of the current state of
manufacturing in the U.S., with an emphasis of how production industries ranging from heavy
industry to biotech can compete in an era increasingly focused on intellectual heft and
engineering prowess. For one aspect of the study, which is called Production in the Innovation Economy, researchers
looked at how non-software companies licensing technology from MIT fared in the wild from 1997 to 2008. Those 150 companies
represented a diverse range of sectors, including advanced materials and energy, biopharma, medical devices, robotics,
semiconductors, and electronics. And for many of them, MIT officials found a pretty clear chasm when it

came time to reach large-scale production. Heres how the rough timeline broke down: MIT says
that on the whole, the 150 production companies it studied were able to get financing that
bankrolled their early growth in the U.S.sometimes for up to 10 years. But many of them,
when they came to the stage of moving to full-scale commercialization, could not find finance in
the U.S., the report says. As many of them made the transition from venture funding to high-volume manufacturing, they

Thats just a preview of

the findings from MITs big study, which is expected to publish its final results in a pair of books
later this year. Itll be interesting to track the research as more detail emerges, to see just how
significant the exodus was for those companies being tracked. Its certainly a topic that many
people are interested in lately. With Januarys U.S. unemployment tally still above 12 million in the aftermath of the
eventually had to look for foreign investors and often moved abroad to manufacture their products.

Great Recession, politicians, some businesses, and labor leaders are keen on making sure the U.S. has some form of manufacturing
sector to call its own. President Barack Obama is chief among those emphasizing domestic manufacturing jobsfrom a legendary
dinner roundtable with the late Apple CEO Steve Jobs (Those jobs arent coming back) to his recently outlined plan for $6 billion
in manufacturing tax credits. The U.S. is still the worlds largest manufacturing economy, albeit with

China close behind, according to figures from the National Association of Manufacturers. And
some very serious manufacturing workhello, Boeing 787is clearly better off being done at
home. But high-tech gadgets produced at huge volumes (the kind of things that made Apple one
of the worlds most valuable companies) are run almost exclusively through overseas economies.
And even tiny startups backed by crowdfunding are turning to premium factories in China to get their orders churned outand lets
not forget overseas drug development. If theres a cure to be found, you could do worse than having 20-

some MIT minds hacking away at a solution.

Manufacturing isnt keyInformation age

Chapman 12 (Steve Chapman is a columnist and editorial writer for the Chicago Tribune
March 18, 2012 Manufacturing an economic myth Nostalgia is no guide to sound policy
http://articles.chicagotribune.com/2012-03-18/news/ct-oped-0318-chapman20120318_1_manufacturing-sector-rick-santorum-products)
Barack Obama and Rick Santorum probably couldn't agree that August falls in summer, but on one important issue they are closer
than the Winklevoss twins. Both regard manufacturing as precious beyond words, and both think the

federal government should be making special efforts to promote it. Obama favors an array of tax
breaks to induce manufacturers to keep jobs in the United States, and Santorum wants to
completely scrap the corporate income tax on companies in this particular sector. " Everybody
benefits when manufacturing is going strong," said the president. Santorum recently lamented, "We have the manufacturing sector
of the economy when I was growing up that was 21 percent of the workforce. It's now 9." These are not exactly new sentiments.
Walter Mondale, the 1984 Democratic presidential nominee, demanded, "What do we want our kids to do? Sweep up around the
Japanese computers?" In 1992, independent presidential candidate Ross Perot, railing against the North American Free Trade
Agreement, forecast "a giant sucking sound" caused by jobs going to Mexico. Pundits galore have long warned that we are "losing our
manufacturing base." But if nostalgia were a sound guide to economic policy, we should be building

Studebakers and rotary telephones. Neither Santorum nor Obama seems to grasp the realities of
manufacturing in 21st-century America. The first is that it's not declining in the ways that
matter. Compared with 1990, the total value of U.S. manufacturing output, adjusted for
inflation, was up by 75 percent in 2010 despite a drop caused by the Great Recession . It has
declined as a share of gross domestic product only because other industries have expanded even more rapidly. Economist Mark J.
Perry of the University of Michigan at Flint points out that in 2009, the total value of America's manufacturing output was nearly 46
percent greater than China's. Over the past two decades, our share of the world's manufacturing has been pretty stable. The

decline in the number of manufacturing jobs is taken as evidence that the sector is sick or
uncompetitive or the victim of unfair trade practices. In reality, the change indicates sound
health. Our manufacturing workers have become so much more productive that they can churn
out more goods with a far smaller workforce. The same pattern, by the way, is evident in American agriculture. In
1900, 39 percent of all Americans lived on farms. Today it's 1 percent. It's a good thing, not a bad thing, that we need fewer people to
produce our food. Likewise with manufactured products. Manufacturing accounts for a shrinking slice of the

total economy mainly because as we grow wealthier, we spend a smaller portion of our income
on physical products, like cars and appliances, and a bigger one on services, from health care to
cellphone contracts to restaurant meals. That phenomenon holds across the developed world. It's the result of the
free market at work, endlessly shifting resources to accommodate changes in consumer demand. Politicians don't think they should
tell Americans to eat at Burger King instead of Chipotle, or buy baseball bats instead of soccer balls. They didn't insist we

keep our typewriters when personal computers came along.

Manufacturing only accounts for 3.8% of the economy

Jackson 10 (Walker Jackson is a writer Aug 20, 2010 Is Manufacturing Still Important to the
U. S. Economy? http://virtual.auburnworks.org/m/blogpost?id=3307508%3ABlogPost
%3A3736)
Trade data paints a troubling picture the U.S. is simply no longer an exporting nation. As of October 2009 , the U.S. trade
deficit for all goods and services was $32.9 billion. In 2000, the U.S. exported $29 billion more
high-tech products than we imported and by 2007 this had turned into a $54 billion trade
deficit. While the U.S. high-tech manufacturing sector is still relatively strong, it ceased being
the world leader in high-technology production in 2003 when overtaken by China. During the 1990s,
U.S. high-technology industries accounted for about 20 percent of the worlds high-technology exports, approximately twice the level
of all other U.S. manufacturing industries (high-tech industries include: communications equipment, computers and office
machinery, pharmaceuticals, scientific instruments and aerospace). Starting in the late 1990s, the U.S. world export share declined
continuously across all 5 high-tech manufacturing industries, dropping to an average of 12 percent of the worlds exports in 2005.

Losses in communications equipment, office machinery and computers, which collectively

account for nearly 60 percent of U.S. high-tech exports, primarily drove the overall decline. The
U.S. is ranked first in value-added world share in three of five high-technology industries (scientific
instruments, aerospace, and pharmaceuticals) and is ranked second in the other two (communications equipment, and office
machinery and computers). As of 2008, the only two significant industries in which the U.S. has a trade

advantage are chemicals and non-passenger vehicle transportation equipment (including

aerospace). Despite all if this, the sky is not falling there a several positive trade indicators: -- among all U.S. exports,
manufactured products are the most dominant, accounting for 57 percent of total value, services are at 30 percent, agriculture at 6
percent and all others at 7 percent; -- positive impact on overall wages: employees in the top-third earn an annual total
compensation package of about $86,000; the middle-third earn almost $67,000 with the bottom third earning about $58,600; -the U.S. attracts the most foreign direct investment of any nation in the world. Foreign firms now employ about 1 in 12 (8%) U.S.
manufacturing workers; -- manufacturing establishments by size: there are approximately 331,335 manufacturing companies in the
U.S., of these: 53.4 % employ 1 to 9 workers; 38 % employ 10 to 99 workers; 7.6 % employ 100 to 499 workers; .7 % employ 500 to
999 workers with .3 % employing 1,000+ workers. Note: 91.4% of manufacturing companies employ 1 to 99 workers! 1.0% of
manufacturing companies employ 500+ workers! The share of small and medium-sized manufacturers

reporting that exports account for more than one-quarter of their sales more than tripled from
2001 to 2008, from 3.8 percent to 12.8 percent, respectively. Tomorrows large companies are
likely todays small companies.

AT: Oil
Benefits of oil exaggeratedloss of jobs and spills prove

Fried 11 (Kate is the Senior Communications Manager November 15th, 2011 New Analyses
Show Oil and Gas Industry Is Inflating the Job-Creating Potential of Shale Gas Development
http://www.foodandwaterwatch.org/pressreleases/new-analyses-show-oil-and-gas-industry-isinflating-the-job-creating-potential-of-%E2%80%A8%E2%80%A8shale-gas-development/ )
Washington, D.C. Will the oil and gas industry create 1 million new jobs for Americans, as its
latest advertisement claims? The American Petroleum Institute and major oil and gas
corporations are spending millions to convince Americans that with unrestricted access to
natural resources, they can lift us from our economic slump in part by fracking our nations
shale gas reserves. But Exposing the Oil and Gas Industrys False Jobs Promise for Shale Gas
Development, a new set of analyses released today by the national consumer advocacy
organization Food & Water Watch, finds that the oil and gas industry is exaggerating the
capacity of shale gas development to generate jobs and economic opportunity for Americans, in
one case exaggerating projected job creation by 900 percent. The oil and gas industry has tried
to stand on three legs, claiming that shale gas is good for the environment, good for American
energy security and good for the economy. The first two legs have already been kicked out, and
our new analysis kicks out the third, said Food & Water Watch Executive Director Wenonah
Hauter. They have no legs left to stand on. A 2011 report by the Public Policy Institute of New
York State (PPINYS) claimed that by 2018, developing 500 new shale gas wells each year in five
counties in New York would create 62,620 jobs. Food & Water Watch closely examined the
PPINYS report and found it riddled with flaws; in fact, the economic forecasting model that
PPINYS used actually only supported a claim of 6,656 jobs. PPINYS inflated the job-creation
potential of shale gas development by almost 900 percent. According to Food & Water Watch,
even the corrected PPINYS jobs projection is overly optimistic because it fails to account for
negative effects that shale gas development would have on other key parts of the economy, such
as agriculture and tourism. Exposing the Oil and Gas Industrys False Jobs Promise for Shale
Gas Development examines employment data, revealing that opening up five counties in the
southern tier of New York to shale gas development can be expected to generate a net gain in
employment of only about 2 jobs per well. This calculation, derived from data on actual
employment, is in stark contrast with the forecast of 125 jobs per well in the PPINYS report.
According to Food & Water Watch, an employment gain of just 2 jobs per shale gas well does not
justify the inevitable costs to public health, public infrastructure and the environment that the
industry would bring to New York. Across the United States, shale gas development has
generated a barrage of costly consequences: -To date, over 1,000 cases of drinking water
contamination have been reported near shale gas development sites around the U.S. -In 2008, a
fracking wastewater pit in Colorado leaked 1.6 million gallons of fluids, some of which
contaminated the Colorado River. -In Wise County, Texas, properties with fracking wells have
lost 75 percent of their value. -In 2009, Pennsylvania regulators ordered the Cabot Oil and Gas
Corporation to cease all fracking in Dimock, Pa., after three spills at one well within a week
polluted a wetland and endangered fish in a local creek. The spills leaked 8,420 gallons of fluids
that contained potential carcinogens. The state fined the company $240,000, and it cost more
than $10 million to deliver potable water to the affected homes. A legal battle has now ensued
over who should be responsible for providing Dimock residents with clean water. -Scientists
have found that 25 percent of the hundreds of chemicals used in fracking can cause cancer, 37
percent can disrupt the endocrine system and 40 to 50 percent can affect the nervous, immune
and cardiovascular systems. -Fracking wells in Pennsylvania, a state with many active sites, are
expected to create 19 million gallons of wastewater this year, yet many municipal treatment

plants lack the capacity to treat fracking wastewater in part because it often contains radioactive
elements. Many of the flaws in the PPINYS report come from a series of studies led by Timothy
Considine of the University of Wyoming. His series of studies have informed many evaluations
of the economic potential of shale gas development by policymakers, including the U.S.
Department of Energys Shale Gas Subcommittee. The industrys jobs projections are used to
make the case for deregulation, but the oil and gas companies recent record tells a different
story. According to a report released in September by Congressman Ed Markey (D-Ma.),
ExxonMobil, Chevron, BP, Shell and ConocoPhillips, all involved in shale gas development, paid
their executives a total of nearly $220 million and recorded $73 billion in profits in 2010.
However, the Big 5 oil companies reduced their global workforce by a combined 4,400
employees that same year. While President Obamas recent move to delay his decision on the
Keystone XL Pipeline is a sign that his administration is attuned to public concern about the
negative effects of tar sands, we hope he will not replace it with shale gas development, said
Hauter. The oil and gas industry has exploited our economic woes to promote shale gas, yet
actual employment data shows that it is not a cure-all for our nations economic challenges; the
money to be made from shale gas development will mostly just benefit oil and gas executives.

Oil is unsustainable for the economy peak oil and speculation

Ahmed 06-25 (Nafeez Mosaddeq Ahmed Author, Journalist, Scholar; environment writer, The
Guardian,Shale gas won't stop peak oil, but could create an economic crisis originally published
by The Guardian blog | Jun 25, 2013 http://www.resilience.org/stories/2013-06-25/shale-gaswon-t-stop-peak-oil-but-could-create-an-economic-crisis)
A new report out last week from the US Energy Information Administration (EIA) has doubled estimates of "technically recoverable"
oil and gas resources available globally. The report says that shale-based resources potentially increase the

world's total oil supplies by 11 per cent. Acknowledging fault-lines in its new study, contracted to
energy consulting firm Advanced Resources International Inc. (ARI), the EIA said: "These shale
oil and shale gas resource estimates are highly uncertain and will remain so until they are
extensively tested with production wells." The report estimates shale resources outside the US by extrapolation based
on "the geology and resource recovery rates of similar shale formations in the United States." Hence, the EIA concedes that "the
extent to which global technically recoverable shale resources will prove to be economically recoverable is not yet clear." Two years
ago, following the publication of the EIA April 2011 report a New York Times investigation obtained internal EIA communications
showing how senior officials, including industry consultants and federal energy experts privately voiced scepticism about shale gas
prospects. One internal EIA document said oil companies had exaggerated "the appearance of shale gas well profitability" by
highlighting performance only from the best wells, and using overly optimistic models for productivity projections over decades. The
NYT reported that the EIA often "relies on research from outside consultants with ties to the industry." The latest EIA shale gas
estimates, contracted to ARI, is no exception. ARI, according to the NYT's 2011 article, has "major clients in the oil and gas industry"
and the company's president, Vello Kuuskraa, is "a stockholder and board member of Southwestern Energy, an energy company
heavily involved in drilling for gas in the Fayetteville shale formation in Arkansas." Independent studies published over

the last few months cast even more serious doubt over the viability of the shale gas boom. A
report released in March by the Berlin-based Energy Watch Group (EWG), a group of European
scientists, undertook a comprehensive assessment of the availability and production rates for
global oil and gas production, concluding that: "... world oil production has not increased
anymore but has entered a plateau since about 2005." Crude oil production was "already in
slight decline since about 2008." This is consistent with the EWG's earlier finding that global conventional oil production
had peaked in 2006 - as subsequently corroborated by the International Energy Agency (IEA) in 2010. The new report
predicts that far from growing inexorably, "light tight oil production in the USA will peak
between 2015 and 2017, followed by a steep decline", while shale gas production will most likely
peak in 2015. Shale gas prospects outside the US are incomparable to gains made so far there
"since geological, geographical, and industrial conditions are much less favourable." Consequently, global gas prices
are likely to increase rather than follow the initial US trend. In the meantime, conventional oil
production will continue declining, dropping as much as 40 per cent by 2030. The upshot is that
the US "will not become a net oil exporter." The EGW report follows two other reports published earlier this year
also challenging the conventional wisdom. A Post-Carbon Institute study authored by geologist David Hughes, who worked for 32
years as a research manager at the Geological Survey of Canada, analysed US production data for 65,000 wells from 31 shale plays

using a database widely used in industry and government. While acknowledging that shale has dramatically reversed "the longstanding decline of US oil and gas production", this can only: "... provide a temporary reprieve from having to deal with the real
problems: fossil fuels are finite, and production of new fossil fuel resources tends to be increasingly expensive and environmentally
damaging." Despite accounting for nearly 40 per cent of US natural gas production, shale gas

production has "been on a plateau since December 2011 - 80 per cent of shale gas production
comes from five plays", some of which are already in decline. "The very high decline rates of
shale gas wells require continuous inputs of capital - estimated at $42 billion per year to drill
more than 7,000 wells - in order to maintain production. In comparison, the value of shale gas
produced in 2012 was just $32.5 billion." The report thus concludes: "Notwithstanding the fact that in theory some of
these resources have very large in situ volumes, the likely rate at which they can be converted to supply and their cost of acquisition
will not allow them to quell higher energy costs and potential supply shortfalls." Report author Hughes said that the main problem
was the exclusion of price and rate of supply: "Price is critically important but not considered in these estimates." He added: "Only a
small portion [of total estimated resources], likely less than 5-10 per cent will be recoverable at a low price... "Shale gas can continue
to grow but only at higher prices and that growth will require an ever escalating drilling treadmill with associated collateral financial
and environmental costs and its long term sustainability is highly questionable." Another report was put out by the

Energy Policy Forum, and authored by former Wall Street analyst Deborah Rogers - now an
adviser to the US Department of the Interior's Extractive Industries Transparency Initiative.
Rogers warns that the interplay of geological constraints and financial exuberance are creating
an unsustainable bubble. Her report shows that shale oil and gas reserves have been: "...
overestimated by a minimum of 100% and by as much as 400-500% by operators according to
actual well production data filed in various states... Shale oil wells are following the same steep
decline rates and poor recovery efficiency observed in shale gas wells." Deliberate
overproduction drove gas prices down so that Wall Street could maximise profits "from mergers &
acquisitions and other transactional fees", as well as from share prices. Meanwhile, the industry must still service high levels of debt
due to excessive borrowing justified by overinflated projections: "... leases were bundled and flipped on unproved shale fields in
much the same way as mortgage-backed securities had been bundled and sold on questionable underlying mortgage assets prior to
the economic downturn of 2007." Seeking to prevent outright collapse, the report argues, the US is

ramping up gas exports so it can exploit the difference between low domestic and high
international prices "to shore up ailing balance sheets invested in shale assets." Rogers, who
testified last month before the Senate Committee on Energy and Natural Resources, also
expressed scepticism about the EIA's latest assessment: "The EIA actually does retrospective
assessments of their forecasting and their track record is dismal... They admit that they
overestimated natural gas production 66 per cent of the time and crude 59.6 per cent of the time
in their March 2013 assessment for 2012." She added that "there is definitely a bubble." Though it would not have an
impact as devastating as the banking crisis, she said: "The oil majors do have losses, but the smaller independents are being shaken
out. Chesapeake and others are struggling, like Devon, Continental, Kodiak and Range. Without exception, they all have had a
significant deterioration in negative free cash since 2010. This is obviously not sustainable." The impact of this

would be greater centralisation, with smaller companies and their assets being absorbed by the
oil majors through mergers and acquisitions. Rogers said: "What is most troubling to me is that
there appears to be a complacency setting in about transitioning to a more sustainable energy
economy. Shales should be used as a bridge. But we are hearing far too much euphoric talk about 100-200 years of natural gas.
Therefore no need to worry, it can be business as usual. This is highly problematic in my
opinion. We must globally transition away from hydrocarbons."